US inflation drags down FTSE
London’s leading shares plunged into the red today after struggling to hold onto early gains as US inflationary pressures continued to dog the market.
Mining stocks and a rash of corporate results had helped the FTSE 100 Index clamber into positive territory this morning.
But a gloomy opening on Wall Street and continuing worries over the war in the Middle East, sparked a downturn in trading and the FTSE closed 47.5 points down at 5880.8.
Will Armitage, an analyst at IG Group, said the slip was “no surprise” after last week’s gains, which were the biggest since March 2003.
He suggested investors were cashing in on the back of positive corporate results before more doom and gloom set in from the States.
Among the climbers was Tate & Lyle, which lifted 7p to stand at 692p, as investors cheered news of a trade agreement between America and Mexico over sweeteners. ABN Amro lifted the stocks target price from 710p to 775p.
Meanwhile, a rise of 1.5p to 165.25p for support services group Rentokil Initial came as analysts began to ponder whether results from the company later in the month will prove to be better than expected as restructuring initiatives take effect.
Online gambling firm PartyGaming found itself at the top of the fallers board - down 3.75p at 105.75p – following more bad news for rival BetonSports, which yesterday saw an extension of a order banning the company from taking bets from the US.
Competitor 888 suffered a similar fate losing 12p to 143p and Sportingbet fell 4% – or 10.7p to 235p – after a broker cut its target on the stock, despite a trading update forecasting results in line with expectations.
Among companies reporting, results from Halifax Bank of Scotland caused barely a ripple in the banking sector despite profits ahead of expectations.
HBOS shares were 2p lower at 972.5p, while Lloyds TSB was down 5p at 534p as it prepared for its own half-year results tomorrow.
Barclays, which posts figures on Thursday, dropped 4p at 624p and HSBC dipped 11p to 960p following a 18% surge in half-year profits of £6.7bn (€9.81bn) yesterday.
Outside the top flight news of the continued bidding war for retirement homes builder McCarthy & Stone sparked a 22p rise in the firm’s shares to 1099p.
Investors reacted favourably to an improved £1.1bn (€1.6bn) offer from a consortium made up of Bank of Scotland and billionaire investors Simon and David Reuben and Sir Tom Hunter.
Builders merchant Travis Perkins, which has been battling struggling sales at its Wickes DIY stores, boomed 80p to 1605p after reporting improved pre-tax profits and forecasting a “gradual recovery” during the rest of the year.
The day’s biggest blue chip risers were Cairn Energy up 36p to 2147p, BG up 8.5p to 728.5p, Imperial Chemical up 4.25p to 375p and Tate & Lyle up 7p to 692p.
The day’s biggest blue chip fallers were PartyGaming down 3.75p at 105.75p, Carnival down 59p to 2076p, Smith & Nephew down 10.75p to 450.25p and Severn Trent down 29p to 1269p.
