London close: Footsie hits 5-month low
London’s problems were compounded by a big slide on Wall Street as Citigroup posted a quarterly loss of almost $10bn, with the leading index closing at its lowest since mid-August.
All but a handful of blue chips finished in the red, with stronger than expected December inflation data also unsettling the market. Investors are now less certain that UK interest rates will fall next month.
The UK Consumer Price Index showed an annual gain of 2.1% last month, slightly higher than economists’ forecasts and the Bank of England’s target of 2%.
Tesco stayed lower after a mildly disappointing trading update. Underlying like-for-like UK sales for the six weeks to 5 January rose 3.1%, below expectations, which had ranged between 3.5% and 4.5%.
But the supermarket titan’s stumble encouraged rival J Sainsbury, which also benefited from a Goldman Sachs upgrade to “buy” from “neutral”.
Brokers were not so kind to British Land. SG Securities chopped its price target to 780p from 870p and downgraded its view to “sell” from “hold”, sending the real estate giant south.
HSBC also tumbled as Goldman Sachs reiterated its “sell” rating on the strength of continued sub-prime worries and concerns about the US economy, while JP Morgan changed its stance on DIY chain Kingfisher from “overweight” to “neutral”.
Housebuilder Taylor Wimpey was another casualty. It said market conditions in the UK were subdued throughout the second half of 2007 and the year-end order book is down to £1.06bn from £1.32bn. Market conditions in the US remain "exceptionally challenging," it added, although it expects to hit full year profit expectations.
Northern Rock shareholders have voted against all but one of the resolutions proposed by rebel shareholders SRM and RAB Capital to force the mortgage lender to consult with investors before completing any material corporate activity.
Among the retailers, Debenhams saw sales in the four weeks of Christmas to 5 January 2008 rose by 4.4% with like-for-like sales for the festive period up by 2.2%. Like-for-like sales for the 18 weeks were flat, reflecting the poor general market conditions. Profit sent the shares lower after yesterday's surge.
Burberry's third-quarter sales rose 26%, with retail sales up 14% and like-for-like retail sales up by 6%, but the shares were left looking threadbare today as the firm said retail sales were modestly behind plan, with proportionally more inventory sold during the sale period.
Blacks Leisure was marked lower after warning that full year operating profits are likely to be ahead of last year but below market expectations, due largely to declining sales in the second half of the year of clothing aimed at surfer dudes and skateboarders.
Computer games retailer Game expects full-year pre-tax profits of not less than £73m, up from previous forecasts of £70m, as it posted a 31.9% jump in like-for-like sales over the Christmas period.
Northern Foods' trading in the key Christmas period has been in line with forecasts and the ready meals group expects pre-tax profit to achieve market consensus for the full year.
Goldman Sachs is also bearish on Firstgroup, and has downgraded the rail and bus operator to “sell” from “neutral”. Last week shares in Firstgroup fell heavily after train drivers and guards on one of its main franchises voted for strike action. Fellow traveller National Express declines in sympathy.
Oil explorer Venture Production said daily oil production for 2007 fell, but said higher commodity prices would largely offset the lower production. Average net daily production for 2007 was 41,228 barrels of oil equivalent per day, which is a decrease of 7.7% over 2006.
Shares in mobile software developer i-mate plunged after it said it is reviewing its strategic options. The company has run into difficulties because one of its leading chip suppliers has failed to supply its manufacturers with the required volume of chips this quarter.
Mobile content provider Mobile Streams is also in the dumps after revealing its full year earnings are likely to be below the level indicated at the interim stage. Trading EBITDA is expected to show a loss of £1.1m, which includes one-off reorganisation and bad debt charges incurred of around £0.5m.
On the bid front, Regent Inns was in demand after revealing it has received a number of preliminary bid approaches, while DNA diagnostic specialist Whatman is another in good health after confirming bid interest from a number of parties.
Business class only airline Silverjet recovers some of yesterday’s losses which were prompted by an exceedingly pessimistic research report from broker Daniel Stewart. The company responded after trading closed yesterday with a criticism of the 32 page report which it said contained a number of material mistakes and inaccuracies.
FTSE 100 - Risers
Experian Group (EXPN) 375.00p +2.46%
Sainsbury (J) (SBRY) 386.00p +1.78%
ITV (ITV) 70.10p +1.30%
Man Group (EMG) 533.50p +0.66%
Imperial Tobacco Group (IMT) 2,611.00p +0.42%
FTSE 100 - Fallers
Taylor Wimpey (TW.) 159.20p -7.71%
Home Retail Group (HOME) 261.75p -6.85%
Kingfisher (KGF) 122.20p -6.79%
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British Land (BLND) 882.00p -6.62%
Carphone Warehouse Group (CPW) 293.00p -6.24%
Enterprise Inns (ETI) 392.00p -6.05%
FirstGroup (FGP) 634.50p -5.93%
Royal Bank of Scotland Group (RBS) 392.00p -5.88%
Kazakhmys (KAZ) 1,267.00p -4.95%
Antofagasta (ANTO) 632.50p -4.89%
FTSE 250 - Risers
Restaurant Group (RTN) 136.00p +10.57%
Henderson Group (HGI) 115.00p +6.24%
Moneysupermarket.com (MONY) 117.75p +3.29%
International Ferro Metals (IFL) 109.50p +2.82%
Johnston Press (JPR) 228.75p +2.81%
Tate & Lyle (TATE) 482.00p +2.55%
Northern Foods (NFDS) 85.75p +2.39%
Autonomy Corporation (AU.) 986.00p +2.07%
F&C Asset Management (FCAM) 187.75p +2.04%
Kier Group (KIE) 1,350.00p +1.89%
FTSE 250 - Fallers
Debenhams (DEB) 63.75p -16.67%
Burberry Group (BRBY) 406.50p -16.44%
Northern Rock (NRK) 69.25p -16.06%
Venture Production (VPC) 737.50p -12.88%
Game Group (GMG) 200.00p -11.60%
JD Wetherspoon (JDW) 302.50p -10.64%
Imperial Energy Corporation (IEC) 1,635.00p -9.87%
HMV Group (HMV) 96.75p -8.94%
Kesa Electricals (KESA) 184.25p -8.90%
Galliford Try (GFRD) 84.00p -8.45%
