- FTSE 100 closes 17.67 points lower at 6,818.63
- Ex-divi stocks, Tesco, miners provide drag
- Focus on US data misses and tomorrow's ECB meeting
techMARK 2,822.66 +0.31%
FTSE 100 6,818.63 -0.26%
FTSE 250 15,986.47 +0.09%
Ex-dividends, supermarkets and miners dragged the FTSE to yet another negative finish today, with the index closing 17.67 points lower at 6,818.63.
Also weakening sentiment were worse than expected ADP jobs figures in the States, alongside misses for both productivity and trade data.
Chris Beauchamp, Market Analyst at IG, said: "Ex-dividend stocks and Tesco have been the primary culprits of the FTSE's underperformance versus its peers today, but so long as 6,800 holds the bias remains to the upside. However, until we see 6900 and then move beyond it, it would be too early to suggest a continuation of the rally.
"M&A activity once again lifted Smith & Nephew, and it is pleasant to realise that there are still some things moving in the market and that not everything has shifted into neutral ahead of the ECB meeting. Tesco has seen the fall in its share price intensify this afternoon, putting the supermarket giant on a collision course with the 280p level that marked the lows in April."
This comes ahead of tomorrow's European Central Bank (ECB) meeting, at which members are widely expected to loosen monetary policy in a bid to address weak inflation, high unemployment and a stagnant recovery.
"If the ECB decides to undergo a more aggressive position with respect to combatting inflation, participants will be looking to see how much has already been reflected by prices," noted SpreadEx's David White.
For his part, Chief UK and European Economist at IHS Global, Howard Archer, revealed he sees the ECB cutting interest rates by 10 to 15 points, including taking its deposit rate modestly into negative territory.
"However, we remain doubtful that the ECB will undertake full blown quantitative easing. We suspect this will only happen if Eurozone consumer price inflation falls to new lows over the coming months and Eurozone growth falters markedly," he said.
ADP, productivity, trade data disappoints
Private-sector payrolls increased at the slowest pace in four months in May, according to a report by Automatic Data Processing (ADP). Just 179,000 private payrolls were added last month, down from the 215,000 gain registered in April and below the 210,000 consensus estimate.
In other economic data, US non-farm business sector labour productivity in the first quarter of 2014 was revised lower to show an annual fall of 3.2%, marking the largest drop in productivity since the first quarter of 2008.
Meanwhile, the US trade deficit increased by 6.9% to $47.2bn in April, its highest in two years, according to the Commerce Department. This was up from a revised $44.2bn in March and surprised analysts looking for a fall to $40.6bn.
Ex-divi stocks provide drag as Sports Direct heads higher
National Grid led the fallers after going ex-dividend, with WPP also lower for the same reason.
Tesco erased earlier gains and dropped into the red as the decline in like-for-like (LFL) sales at its UK business worsened in the first quarter, with the recent wave of price cuts and competitive measures taking its toll on the top line. UK LFL sales excluding petrol fell by 3.7% in the first three months of Tesco's fiscal year, worse than the 2.9% drop recorded in the fourth quarter but not as bad as some analysts had feared.
in grocery rival J Sainsbury put in an even worse performance, while WM Morrison was also out of favour after the statement.
SABMiller was in the red on the back of a downgrade from Morgan Stanley to 'equal weight' from 'underweight', while, Sports Direct rose after Exane BNP Paribas put the retailer on its 'key ideas' list.
Shares in Smith & Nephew were also making gains after JPMorgan Cazenove said that M&A speculation could provide support to the stock in the near term after its recent strong performance.
FTSE 100 - Risers
Sports Direct International (SPD) 799.00p +3.63%
Smith & Nephew (SN.) 1,064.00p +3.30%
Melrose Industries (MRO) 280.50p +1.89%
Mondi (MNDI) 1,095.00p +1.86%
Weir Group (WEIR) 2,629.00p +1.66%
Whitbread (WTB) 4,243.00p +1.41%
Friends Life Group Limited (FLG) 314.00p +1.39%
Standard Life (SL.) 393.50p +1.39%
G4S (GFS) 249.00p +1.38%
Shire Plc (SHP) 3,514.00p +1.36%
FTSE 100 - Fallers
National Grid (NG.) 830.50p -5.36%
WPP (WPP) 1,261.00p -2.10%
Sainsbury (J) (SBRY) 327.60p -1.86%
Antofagasta (ANTO) 778.00p -1.52%
Centrica (CNA) 329.70p -1.49%
Tesco (TSCO) 293.50p -1.34%
Vodafone Group (VOD) 205.10p -1.18%
SABMiller (SAB) 3,255.00p -1.17%
Royal Dutch Shell 'A' (RDSA) 2,343.50p -1.14%
Pearson (PSON) 1,158.00p -1.11%
FTSE 250 - Risers
Vedanta Resources (VED) 1,179.00p +4.99%
Workspace Group (WKP) 608.50p +4.20%
RPC Group (RPC) 648.00p +4.10%
Imagination Technologies Group (IMG) 235.40p +3.84%
Close Brothers Group (CBG) 1,329.00p +3.42%
Petra Diamonds Ltd.(DI) (PDL) 163.90p +3.08%
SIG (SHI) 199.30p +2.36%
Northgate (NTG) 525.00p +2.34%
Dairy Crest Group (DCG) 470.10p +2.33%
Enterprise Inns (ETI) 137.60p +1.93%
FTSE 250 - Fallers
Evraz (EVR) 96.20p -7.05%
Tullett Prebon (TLPR) 287.40p -5.46%
Supergroup (SGP) 1,110.00p -5.13%
Perform Group (PER) 266.30p -4.35%
Debenhams (DEB) 74.50p -3.12%
Partnership Assurance Group (PA.) 125.90p -2.70%
Electrocomponents (ECM) 278.70p -2.65%
Laird (LRD) 294.10p -2.58%
Ophir Energy (OPHR) 253.00p -2.50%
Bank of Georgia Holdings (BGEO) 2,454.00p -2.23%