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London midday: UK stocks near one-month low as retailers drop

Date: Tuesday 16 Sep 2014

London midday: UK stocks near one-month low as retailers drop

UK stocks were trading at levels not seen in nearly a month on Tuesday as a sharp drop in German economic confidence and disappointing data from China dampened sentiment.
A profit warning from online fashion retailer ASOS and a disappointing updates from Thomas Cook, N Brown and Crest Nicholson were also weighing on markets.

Investors were continuing to scale back their risk appetite ahead of a Federal Reserve monetary policy decision and this week's vote on Scottish independence.

London's FTSE 100 was down 0.7% at 6,756 by midday. The last time the index closed below this level was on 20 August when it settled at 6,755.48.

Germany ZEW, Chinese FDI, UK CPI

German economic expectations fell for a ninth straight month in September, according to the ZEW surveys out on Tuesday. The investor expectation index declined from 8.6 to 6.9, while the current situation index dropped from 44.3 to 25.4 (consensus forecast: 40).

Meanwhile, Chinese foreign direct investment unexpectedly dropped by 14% in August, an improvement on the 16.9% decline registered in July but well below the 0.8% increase predicted by analysts.

Markets were also digesting UK inflation data which, although in line with expectations, showed that consumer-price rises slowed to match a five-year low in August. The annual rate of inflation eased to 1.5% last month from 1.6% in July.

Retailers Asos and N Brown see shares sink

The share price of Asos dropped sharply after the online fashion retailer said profits in the year to August 2015 would be "at a similar level" to the previous period. This implies that pre-tax profit will be around £45m next year, compared with analysts' forecast of £63m.

Sector peer N Brown was also under pressure after saying that first-half revenues fell 0.6% during a "transitional year" for the business.

Others in the retail sector such as Sports Direct, JD Sports Fashion, Home Retail and Next were also trading in the red.

Housebuilder Crest Nicholson has, like its peers, seen a "slight moderation" in sales rates over the last few months, causing shares to fall. Others in the sector including Berkeley Group, Barratt Developments and Bovis Homes were also unwanted.

Travel operator Thomas Cook was flying lower after saying that despite a "material improvement" in annual earnings, business has been affected by the recent downturn in consumer confidence in Germany.

SABMiller pulled back after a 10% surge on Monday after rumours that AB InBev was readying a takeover bid for the Peroni and Grolsch maker. Markets were also still reacting to the announcement that Heineken had rejected an initial approach from SABMiller.

Chipmaker Imagination Technologies was also heavy faller ahead of a trading statement on Wednesday.

Market Movers
techMARK 2,816.53 -1.00%
FTSE 100 6,756.47 -0.70%
FTSE 250 15,514.53 -0.86%

FTSE 100 - Risers
Pearson (PSON) 1,226.00p +1.66%
Reed Elsevier (REL) 1,001.00p +0.55%
WPP (WPP) 1,265.00p +0.40%
GKN (GKN) 341.20p +0.21%
Royal Dutch Shell 'A' (RDSA) 2,393.00p +0.19%
British Sky Broadcasting Group (BSY) 876.50p +0.17%
Unilever (ULVR) 2,693.00p +0.04%

FTSE 100 - Fallers
Sports Direct International (SPD) 667.00p -3.33%
St James's Place (STJ) 674.50p -2.88%
Persimmon (PSN) 1,318.00p -2.37%
ARM Holdings (ARM) 917.00p -2.24%
easyJet (EZJ) 1,330.00p -2.21%
International Consolidated Airlines Group SA (CDI) (IAG) 365.00p -2.14%
SABMiller (SAB) 3,661.50p -2.10%
Petrofac Ltd. (PFC) 1,033.00p -2.09%
Johnson Matthey (JMAT) 3,075.00p -2.01%
British Land Co (BLND) 699.50p -1.96%

FTSE 250 - Risers
Vesuvius (VSVS) 473.00p +2.71%
Ladbrokes (LAD) 128.80p +2.47%
Bank of Georgia Holdings (BGEO) 2,423.00p +2.37%
Evraz (EVR) 125.10p +1.79%
Ophir Energy (OPHR) 231.60p +1.58%
Rathbone Brothers (RAT) 1,950.00p +1.19%
Marston's (MARS) 148.40p +1.09%
Inmarsat (ISAT) 719.00p +1.05%
Ferrexpo (FXPO) 127.60p +1.03%
IG Group Holdings (IGG) 601.00p +1.01%

FTSE 250 - Fallers
Imagination Technologies Group (IMG) 184.00p -6.46%
Thomas Cook Group (TCG) 121.90p -6.23%
Brown (N.) Group (BWNG) 386.90p -4.47%
Crest Nicholson Holdings (CRST) 324.00p -3.83%
Just Eat (JE.) 280.90p -3.80%
Spirent Communications (SPT) 100.00p -3.66%
Foxtons Group (FOXT) 218.70p -3.23%
Hochschild Mining (HOC) 161.10p -3.13%
Smith (DS) (SMDS) 274.80p -3.07%
Enterprise Inns (ETI) 113.40p -2.83%


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