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FTSE 100: This morning’s risers and fallers

Lucinda Beeman
Written By:
Lucinda Beeman

The UK’s blue chips are leading fallers in Europe on Monday after a profit warning from troubled food retailer Tesco.

As of 09:06 the FTSE 100 was 46 points lower at 6,792.86.

Wall Street ended the Friday session on a mixed footing, with market commentary highlighting the tenth consecutive week of gains seen in the US dollar index – its longest stretch since March 1967 – as a result of the build-up in expectations for further policy easing in China and the Eurozone to see of risks to economic growth.

In notes sent out to clients on Friday Barclays Research explained that ´full-blown´ quantitative easing from the European Central Bank in the first quarter of 2015 is now its baseline scenario, with QE possible by year-end.

Similarly, the same broker expects Beijing to cut its main policy rates towards the turn of the year.

“Global indices are looking to start the week on a somewhat softer tone, with the Asian markets leading the way lower overnight,” said Alpari UK market analyst Joshua Mahony.

“Following the excitement of Friday’s Scottish referendum and Alibaba initial public offering, things have come down with a bump, especially in China and Japan where a fall in commodity prices hit valuations.”

Over the weekend, G-20 finance ministers pointed out the uneven nature of economic growth worldwide and the potential for excessive risk in financial markets to build up as a result of low interest rates.

According to US Treasury Secretary Jack Lew the Eurozone and Japan are holding the global economy back. He called on both to do more to help boost the global recovery and improve growth.

Draghi is due to speak on Monday morning, at 11:00, when he will address the European Parliament’s Economic and Monetary Committee, with the focus expected to be very much on monetary policy.

Tesco warns, shares plummet, analysts flabbergasted

In UK company news, Tesco has revised its profit forecast for the six months ended 23 August, saying it had previously overestimated it by £250m. The retailer giant cited “accelerated recognition of commercial income” and “delayed accrual of costs” as the main factors behind the overstatement and announced it was working to establish what impact it will have on the full year.

Communications group WPP announced plans to invest $25m in the AppNexus to enhance its position as the world’s largest independent ad technology provider. The group said that by taking a greater stake in AppNexus, it “further cements its leadership position in ad tech and programmatic targeting”.

Dairy Crest sees first half group profits broadly in line with last year, with sales from its four key brands having grown at a similar pace, of 4%, as in the first quarter, the company said in a pre-close trading update. Property profits from the sale of surplus depots will make up a greater proportion of its profits than in the same period last year.

Property developer British Land has sold £210m of apartments at a flagship development in London’s Mayfair. British Land said it had exchanged on the sale of 18 flats at its Clarges Mayfair development since releasing a number of the properties for sale during the summer.

Iron ore miner London Mining announced it was considering terminating its contract with Glencore, after the firms entered a dispute over an offtake agreement.

Source: ShareCast