Diageo forces FTSE into the red
Shares in London drifted into the red today as investors banked profits in drinks giant Diageo despite a strong set of results.
Shares in Diageo fell 3% even though it met City expectations with a 7% rise in underlying profits over the full year.
The gloom was reflected elsewhere in the market as the FTSE 100 Index gave back some of its recent gains and slipped 8.2 points lower to 5921.1 by lunchtime.
There was not much else on the corporate calendar to inject life into the market and little direction was offered from New York where the Dow Jones Industrial Average closed up 13 points last night.
Diageo was the day's heaviest faller in London, with losses of 26.5p to 932.5p after its pre-tax profits of £2.1bn were tinged by a challenging Irish beer market where Guinness sales slumped 3%.
Also on the slide were a string of insurance firms after strong gains yesterday. Legal & General fell 1.25p to 132.25p and it was followed down by Aviva – off 6.5p to 738p – and Prudential, which lost 4p to 589.5p.
However, going in the opposite direction was cruise firm Carnival which hit the top of the risers board with a gain of 71p to 22261p – more than 3%- after Morgan Stanley cut its price target but said that although in the short term news remains negative it believes this is priced in.
BP was in good cheer after an uncertain few days caused by weak oil prices and news of an investigation into commodity trading in the US. Shares were up 8p to 600p today, although rival Royal Dutch Shell failed to make headway with losses of 10p to 1888p.
Market rumours suggesting Scottish Power could be the subject of an approach from Germany’s RWE caused its shares to spark in early trading but the momentum was not maintained and the stock stood 2p lower at 623.5p.
Shares in the mining sector also lost value despite a positive start. Anglo American was off 37p to 2395p while Kazakhmys slipped 13p to 1230p and BHP Billiton lost 5p to 1006.
Elsewhere, a move by Las Vegas casino giant Harrah’s Entertainment for London Clubs International caused shares in rival Stanley Leisure to jump 30p to 648.5p. Stanley had been working on a merger with LCI, but it could now become a bid target for Harrah’s despite reports that the US firm was not interested. LCI surged 32%, or 32p to 130.75p.
