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FTSE 100: This morning’s risers and fallers

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09/12/2014

UK stocks dropped sharply for the second straight session on Tuesday as plummeting oil prices, macro concerns and a profit warning from retail giant Tesco hammered market sentiment.

After losing 1 per cent of its value the previous session, London’s FTSE 100 was down a further 1.3 per cent at 6,584 in early deals. The index has not closed below this level since 7 November.

Global stock markets were under pressure on Monday as crude prices fell to their lowest levels in over five years. Brent was trading as low as $65.29 a barrel on Tuesday while West Texas Intermediate fell to $62.25 a barrel, a level not seen since September 2009.

In economic data, German imports fell the most in almost two years in October, declining by 3.1 per cent after a sharp rise of 5.2 per cent in September. Exports fell by a less-than-expected 0.5 per cent, leaving the trade surplus above forecasts at €20.6bn.

“After yesterday’s global growth concerns revival, we may have more of the same with this morning’s German trade balance solidity showing a similar make-up to China’s, benefiting from slowing exports and a plunge in imports,” said Mike van Dulken, head of research at Accendo Markets.

“[This] is not what we want to hear for either nation, [with] hopes pinned on the former to help global growth and the latter to help the Eurozone region,” he said.

In the UK, data is expected to show that industrial production has risen 1.8 per cent in October following a 1.5 per cent increase a month earlier, according to analysts’ forecasts. Meanwhile, the NIESR releases its latest gross domestic product estimate, while the British Retail Consortium unveils November sales figures.

Investors were also feeling a little cautious following the news Greece has brought forward its presidential elections by two months, meaning they will now take place this month, potentially triggering a snap election. Athen’s benchmark index was down over 6 per cent early on.

Tesco shares tank, energy stocks extend losses

Tesco surprised the market with another profit warning, causing shares to sink early on. The company said trading profit for the financial year ending February 2015 is not expected to exceed £1.4bn, compared with £3.315bn previously and analysts’ forecasts which ranged from £1.8bn to £2.2bn.

Supermarket rivals Wm Morrison and J Sainsbury also dropped sharply following the unscheduled trading update.

News of falling sales at high street bellwether John Lewis also hit sentiment in the wider retail sector with Next, M&S and Debenhams under pressure. Sales at John Lewis were down 10.6 per cent in the week to 6 December after a strong showing over Black Friday week.

Oil and gas groups were continuing to feel the heat after the recent plunge in crude prices. Tullow Oil, Petrofac, BG Group, Soco International, Enquest, Premier Oil and Afren were all suffering heavy losses.

Polymers group Victrex was a rare bright spark on Tuesday after beating forecasts with a 9 per cent rise in annual profits. The company also raised its full-year dividend by 5 per cent and said it would be returning £43m to shareholders as part of a special dividend.

A number of property stocks such as Land Securities, British Land andShaftesbury were advancing as defensive sectors benefitted from a reduction in risk appetite. Consumer staples companies such as Imperial Tobacco and SABMiller also saw shares edge higher.

Land Securities also announced that it has sold two retail assets in Scotland for £224.1m as it continues to “reshap[e] our shopping centre portfolio to focus on dominant regional and Greater London assets”.
Market Movers
techMARK 2,942.32 -0.92%
FTSE 100 6,583.95 -1.32%
FTSE 250 15,802.34 -0.94%

FTSE 100 – Risers
G4S (GFS) 279.90p +2.15%
Randgold Resources Ltd. (RRS) 4,254.00p +1.62%
Land Securities Group (LAND) 1,184.00p +0.34%
Reckitt Benckiser Group (RB.) 5,270.00p +0.29%
British Land Co (BLND) 772.50p +0.13%
Imperial Tobacco Group (IMT) 2,828.00p +0.07%
SABMiller (SAB) 3,350.50p +0.01%

FTSE 100 – Fallers
Tesco (TSCO) 165.05p -11.88%
Morrison (Wm) Supermarkets (MRW) 175.40p -5.14%
Sainsbury (J) (SBRY) 225.30p -4.45%
Weir Group (WEIR) 1,667.00p -4.25%
Aggreko (AGK) 1,498.00p -4.04%
Coca-Cola HBC AG (CDI) (CCH) 1,354.00p -3.49%
Petrofac Ltd. (PFC) 741.00p -3.39%
Tullow Oil (TLW) 378.70p -3.34%
Intertek Group (ITRK) 2,249.00p -2.85%
BP (BP.) 405.65p -2.79%

Source: ShareCast

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