London open: Tesco leads UK stocks lower as first-half profits drop
UK stocks fell sharply on Thursday morning, led by poorly-received updates from blue chips Tesco, Tullow Oil and Unilever and a profit warning from Foxtons.
Acacia Mining
234.00p
16:45 16/09/19
Foxtons Group
63.20p
16:34 07/10/24
FTSE 100
8,303.62
16:44 07/10/24
Premier Foods
181.60p
16:50 07/10/24
Tesco
359.80p
16:44 07/10/24
Tullow Oil
26.50p
16:46 07/10/24
Unilever
4,770.00p
16:50 07/10/24
London's FTSE 100 index was down 0.7% at 6,355 in early deals, with ex-dividend stocks also providing a drag.
Markets were also giving a mixed reaction to manufacturing data from China out overnight, which beat forecasts overall but pointed to weakness in some areas.
The HSBC 'flash' purchasing managers' index (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.
"Overall, although the improvement in the PMI is reassuring, the drivers of growth continue to come from the external sector; domestic activity remains soft," said analysts Jian Chang and Rahul Bajoria from Barclays.
PMIs were also in focus this side of the Pond, with the Eurozone composite PMI for both the services and manufacturing sectors expected to fall from 52 to 51.5 in October, as the manufacturing sector contracts.
Standard & Poor's said on Wednesday that it sees the "beginnings of a new phase in the lingering Eurozone crisis". It said the region might be entering a "stubborn" period of subdued growth.
Tesco, Tullow Oil, Unilever, Foxtons
First-half trading profits for Tesco fell 39.4% at constant exchange rates to £937m, well 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%.
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 2,669.30 -0.18%
FTSE 100 6,355.05 -0.70%
FTSE 250 15,084.63 -0.56%
FTSE 100 - Risers
International Consolidated Airlines Group SA (CDI) (IAG) 378.00p +1.83%
easyJet (EZJ) 1,456.00p +1.11%
Royal Mail (RMG) 452.40p +0.82%
Vodafone Group (VOD) 195.70p +0.82%
Fresnillo (FRES) 790.00p +0.77%
London Stock Exchange Group (LSE) 1,934.00p +0.52%
3i Group (III) 377.20p +0.48%
Hargreaves Lansdown (HL.) 952.50p +0.42%
Next (NXT) 6,650.00p +0.38%
Barclays (BARC) 224.20p +0.36%
FTSE 100 - Fallers
Tesco (TSCO) 173.10p -5.41%
Tullow Oil (TLW) 503.00p -4.64%
Unilever (ULVR) 2,445.00p -3.51%
Sainsbury (J) (SBRY) 233.70p -3.27%
Morrison (Wm) Supermarkets (MRW) 152.80p -3.23%
Smiths Group (SMIN) 1,155.00p -2.28%
BAE Systems (BA.) 439.80p -2.11%
BG Group (BG.) 1,041.00p -2.02%
ARM Holdings (ARM) 811.00p -1.93%
Anglo American (AAL) 1,330.50p -1.92%
FTSE 250 - Risers
Inchcape (INCH) 650.50p +2.68%
Britvic (BVIC) 646.00p +1.57%
Bank of Georgia Holdings (BGEO) 2,481.00p +1.27%
Playtech (PTEC) 745.00p +1.02%
Domino's Pizza Group (DOM) 598.00p +1.01%
SEGRO (SGRO) 362.80p +1.00%
Telecity Group (TCY) 735.00p +0.96%
TalkTalk Telecom Group (TALK) 285.20p +0.85%
SVG Capital (SVI) 408.40p +0.81%
Debenhams (DEB) 63.30p +0.80%
FTSE 250 - Fallers
Foxtons Group (FOXT) 173.00p -15.73%
Countrywide (CWD) 461.30p -4.41%
Savills (SVS) 611.00p -3.55%
Afren (AFR) 95.05p -3.31%
Ferrexpo (FXPO) 88.95p -3.26%
Zoopla Property Group (WI) (ZPLA) 208.00p -2.80%
Berkeley Group Holdings (The) (BKG) 2,238.00p -2.70%
IG Group Holdings (IGG) 602.00p -2.59%
Bankers Inv Trust (BNKR) 530.50p -2.48%
Saga (SAGA) 150.70p -2.46%