London midday: UK stocks decline after Tesco, Tullow and Unilever disappoint
Poorly-received updates from heavyweights Tesco, Tullow Oil and Unilever and a profit warning from Foxtons were weighing on UK markets on Thursday, though trading was choppy after some better-than-expected data from the Eurozone.
Acacia Mining
234.00p
16:45 16/09/19
Foxtons Group
55.60p
16:40 24/04/24
FTSE 100
8,040.38
16:34 24/04/24
Premier Foods
156.20p
16:40 24/04/24
Tesco
291.40p
16:40 24/04/24
Tullow Oil
35.10p
16:45 24/04/24
Unilever
3,863.00p
16:40 24/04/24
The FTSE 100 was down 0.6% at 6,359 by noon, pulling back after reaching a two-week high of 6,399.73 on Wednesday.
The Eurozone composite purchasing managers' index (PMI), which measures activity in both the services and manufacturing sectors, unexpectedly increased to 52.2 in October. Economists had estimated a decline from 52 in September to 51.5. PMIs from France showed that both manufacturing- and service-sector activity contracted further this month, though figures from Germany were more resilient.
However, even though the overall composite PMI beat expectations, analyst Apolline Menut from Barclays pointed out that 52.2 was still the second-lowest print this year. "It is worth highlighting that despite positive moves in the headlines, the details continued to paint a very bleak picture," Menut said.
In other news, the HSBC 'flash' PMI for Chinese manufacturing rose from 50.2 to 50.4 in October, surprising analysts who had expected no change. However, a recovery in the employment sub-index was largely behind the rise, and both the output and new orders components actually declined.
UK retail sales fell 0.3% last month against August, although they still racked up their 18th month in a row of year-on-year growth, official data showed. Month-on-month sales fell 0.3% but year-on-year sales rose 2.7%, according to the data from the Office for National Statistics; both figures came in lower than forecasts.
Updates from Tesco, Tullow Oil, Unilever and Foxtons
First-half trading profits for Tesco fell 39.4% at constant exchange rates to £937m, above consensus forecasts of £853m, but that didn't stop the stock from dropping sharply early on. Tesco's chairman Sir Richard Broadbent announced his own succession process had begun, as the company's UK like-for-like sales fell 4.6%. Though the pension deficit surged from £2.6bn to £3.4bn, and net debt increased by £0.5bn year-on-year to £7.5bn, the company later ruled out a rights issue.
Tullow Oil's shares sank after the company's first well in Kenya's Kerio Basin had to be plugged and abandoned.
Consumer goods group Unilever was also a heavy faller after reporting weaker third-quarter sales growth as economic conditions were putting consumers under pressure.
Estate agency group Foxtons delivered a profit warning after being hit by the slowdown in the UK property market. The company said that full-year operating profits would be "below the prior year figure of £49.6m".
Mr Kipling and Sharwoods curry sauce maker Premier Foods also warned that annual profits would be towards the bottom end of hopes, causing the shares to drop.
Tanzania-focused African Barrick Gold impressed the market with rising output and falling costs in the third quarter, as it reiterated its full-year guidance to produce 700,000 ounces of gold.
A host of stocks on the FTSE 350 were trading lower after going ex-dividend on Thursday, including BAE Systems, Howden Joinery, Intu Properties, Rolls-Royce, Senior, Smith & Nephew, William Hill, IG Group, Smiths Group and JD Wetherspoon.
Market Movers
techMARK 2,666.44 -0.29%
FTSE 100 6,358.80 -0.64%
FTSE 250 15,074.35 -0.63%
FTSE 100 - Risers
Intertek Group (ITRK) 2,572.00p +1.98%
International Consolidated Airlines Group SA (CDI) (IAG) 378.50p +1.97%
Severn Trent (SVT) 1,981.00p +0.87%
Royal Mail (RMG) 451.60p +0.65%
easyJet (EZJ) 1,449.00p +0.62%
Vodafone Group (VOD) 195.25p +0.59%
GlaxoSmithKline (GSK) 1,385.00p +0.58%
Diageo (DGE) 1,758.50p +0.43%
Dixons Carphone (DC.) 375.60p +0.35%
United Utilities Group (UU.) 832.50p +0.30%
FTSE 100 - Fallers
Tesco (TSCO) 173.20p -5.36%
Tullow Oil (TLW) 502.50p -4.74%
BG Group (BG.) 1,035.00p -2.59%
Unilever (ULVR) 2,470.00p -2.53%
Anglo American (AAL) 1,324.50p -2.36%
Morrison (Wm) Supermarkets (MRW) 154.20p -2.34%
BAE Systems (BA.) 439.50p -2.18%
Rio Tinto (RIO) 3,024.00p -2.12%
St James's Place (STJ) 678.00p -1.81%
Sainsbury (J) (SBRY) 237.50p -1.70%
FTSE 250 - Risers
Debenhams (DEB) 65.20p +3.82%
Inchcape (INCH) 652.00p +2.92%
Bank of Georgia Holdings (BGEO) 2,508.00p +2.37%
Cineworld Group (CINE) 325.00p +2.33%
African Barrick Gold (ABG) 199.10p +2.10%
Britvic (BVIC) 649.00p +2.04%
Playtech (PTEC) 750.50p +1.76%
Synergy Health (SYR) 1,809.00p +1.52%
Moneysupermarket.com Group (MONY) 197.20p +1.39%
SEGRO (SGRO) 363.90p +1.31%
FTSE 250 - Fallers
Foxtons Group (FOXT) 172.70p -15.88%
Countrywide (CWD) 457.80p -5.14%
Zoopla Property Group (WI) (ZPLA) 203.50p -4.91%
Ladbrokes (LAD) 122.80p -4.81%
Afren (AFR) 94.00p -4.37%
Tate & Lyle (TATE) 581.50p -3.16%
SIG (SHI) 150.60p -3.15%
Ophir Energy (OPHR) 203.00p -3.10%
Savills (SVS) 614.00p -3.08%
IG Group Holdings (IGG) 599.50p -2.99%