- Stocks snap six-day winning streak
- Tate & Lyle, Rolls-Royce issue profit warnings
- Lloyds underwhelms with higher profits in 2013
- Miners fall, AMEC and Imperial rise
techMARK 2,811.28 -0.70%
FTSE 100 6,624.61 -0.76%
FTSE 250 15,968.13 -0.69%
UK stocks opened firmly lower on Thursday after a negative market reaction to a number of blue-chip announcements, including profit warnings from heavyweights Tate & Lyle and Rolls-Royce.
Lloyds Banking Group's share price was also lower after its 2013 results underwhelmed, while weakness in the banking sector also weighed on markets in London.
The FTSE 100 snapped a six-day winning streak and was trading down 0.8% at 6,625 by midday as it pulled back from 6,675.03 on Wednesday - its best closing level since January 23rd.
Market Analyst Craig Erlam from Alpari said that this comes after a "very good February so far" across European equity markets. This morning's falls are "just a small correction on the path back to highs we were trading around in the middle of January".
Investors were also showing caution ahead of economic data in the States on retail sales and initial jobless claims due out later this afternoon.
The lower start this morning followed weakness on Asian and US markets overnight as investors continued to react to comments from Federal Reserve policymakers. One day after Janet Yellen's first testimony as Fed Chair on monetary policy, St Louis Fed President James Bullard said he was "optimistic" about US growth this year and that the Fed could return to more "traditional" monetary policy given the recent drop in the unemployment rate.
Closer to home, the Bank of England's Chief Economist Spencer Dale said that expectations for a rate hike in 2015 are "reasonable". This follows the central bank's Inflation Report yesterday, in which Governor Mark Carney completely revamped his forward guidance plan.
Tate & Lyle, Rolls-Royce, Lloyds and Rio provide a drag
Food and sweetener company Tate & Lyle was down 15% despite saying it expects full-year profits to be broadly in line with the previous year as Sucralose pricing pressures have intensified in the final quarter. The company had previously said that it expected "another year of profitable growth".
Aerospace and defence group Rolls-Royce also dropped 13% after revealing that 2014 revenue and profit is expected to be flat due to cuts in government defence spending, implying a reduction to current consensus forecasts. Defence groups Meggitt and BAE Systems were also lower after the statement.
Banking group Lloyds fell despite swinging to a statutory profit before tax of £415m during 2013, from a loss of £606m the year before. Some analysts said that the bottom line was lower than they expected, while tangible net asset value for the year was also below forecasts.
Mining stocks were largely out of favour this morning as risk appetite was scaled back, with Glencore Xstrata and Anglo American among the worst performers. Rio Tinto also fell after underwhelming with a 10% increase in underlying earnings in 2013 and a 15% rise in the dividend.
Aberdeen was in the red after the asset manager was downgraded from 'hold' to 'underperform' by Jefferies, which said that the recent acquisition of Scottish Widows Investment Partnership will not compensate for the slowdown in the group's main equities business.
Leading the upside was Imperial Tobacco after first-quarter underlying tobacco net revenue rose 1% to £1.56bn, helped by its key Growth Brands.
UK oil and gas engineer AMEC was also making gains after an in-line 2013 report, in which adjusted earnings per share rose 11% despite a 3% dip in revenues. The company also announced a firm offer for Swiss rival Foster Wheeler.
FTSE 100 - Risers
Imperial Tobacco Group (IMT) 2,306.00p +3.64%
Amec (AMEC) 1,124.00p +2.93%
British American Tobacco (BATS) 3,031.00p +1.20%
Royal Dutch Shell 'B' (RDSB) 2,282.00p +1.02%
Reed Elsevier (REL) 916.50p +0.94%
Kingfisher (KGF) 381.60p +0.55%
Royal Dutch Shell 'A' (RDSA) 2,124.00p +0.47%
Petrofac Ltd. (PFC) 1,280.00p +0.47%
AstraZeneca (AZN) 4,019.00p +0.41%
Legal & General Group (LGEN) 233.30p +0.39%
FTSE 100 - Fallers
Tate & Lyle (TATE) 669.50p -14.88%
Rolls-Royce Holdings (RR.) 1,053.00p -12.98%
Aberdeen Asset Management (ADN) 407.80p -4.63%
Lloyds Banking Group (LLOY) 80.05p -4.17%
Tullow Oil (TLW) 762.50p -3.79%
Barclays (BARC) 252.45p -3.07%
BAE Systems (BA.) 426.70p -2.91%
Meggitt (MGGT) 520.50p -2.25%
Anglo American (AAL) 1,507.00p -2.21%
RSA Insurance Group (RSA) 97.25p -1.87%
FTSE 250 - Risers
IP Group (IPO) 198.00p +5.88%
African Barrick Gold (ABG) 257.90p +2.34%
Entertainment One Limited (ETO) 333.40p +2.11%
Keller Group (KLR) 1,214.00p +2.02%
Dunelm Group (DNLM) 900.00p +1.69%
Perform Group (PER) 218.60p +1.67%
Euromoney Institutional Investor (ERM) 1,275.00p +1.67%
Rotork (ROR) 2,555.00p +1.39%
Oxford Instruments (OXIG) 1,529.00p +1.26%
Merlin Entertainments (MERL) 359.60p +1.18%
FTSE 250 - Fallers
Lancashire Holdings Limited (LRE) 703.50p -6.82%
Ladbrokes (LAD) 145.40p -3.84%
Bellway (BWY) 1,582.00p -3.30%
Imagination Technologies Group (IMG) 174.00p -2.96%
Lonmin (LMI) 319.40p -2.95%
Man Group (EMG) 82.00p -2.67%
Pace (PIC) 391.00p -2.62%
Vedanta Resources (VED) 894.00p -2.61%
Workspace Group (WKP) 546.00p -2.50%
Bank of Georgia Holdings (BGEO) 2,175.00p -2.42%