Supermarkets weighed on FTSE indices, which were lower midday, after Tesco (TSCO) named its new CEO aside a bleak trading update, with energy plays and broader retail-sector stocks also falling.
Near noon, the FTSE 100 was down 16.62 points, or 0.25%, to 6732.83, and the FTSE250 was down 81.33 points, or 0.52%, to 15,475.5.
In the US Friday, the Dow rose 123 points at 17,100, the Nasdaq gained 69 points at 4,432 and the S&P 500 advanced 20 points to 1,978. In Asia today, the Hang Seng closed down 68 points at 23,387. Markets in Japan are closed for a public holiday.
Supermarkets titan Tesco (TSCO) ticked 2.73% higher to 292.78p as news of CEO Philip Clarke’s imminent departure offset the impact of another profits warning and further downgrades. Clarke would be replaced by well-regarded Unilever (ULVR) man Dave Lewis in October, having endured a punishing time at the helm.
Tesco also warned that trading conditions have worsened since its Q1 update. A tough grocery market twinned with increasing investment to win back customers meant H1 sales and trading profit ‘are somewhat below expectations’.
Peers suffered. Sainsbury (SBRY) fell 1.19% to 320.85p and Morrisons (MRW) eased 2.16% to 174.15p. Marks & Spencer (MKS) was, however, up 0.25% to 436.8p. Unilever (ULVR) rose 0.17% to 2636.5p on news of Lewis departure for Tesco.
In the broader retail-related sector, Reckitt Benckiser (RB.) fell 0.35% to 5017.5p, while Next (NXT) eased 0.65% to 6487.5p, and Burberry (BRBY) lost 0.69% to 1443p.
Concerns over tensions in Ukraine and the Middle East kept investors in caution mode. Some energy stocks were on the back foot as a result. Wood Group (WG.) lost 1.69% to 754p, Petrofac (PFC) lost 1.3% to 1176.5p, Royal Dutch Shell (RDSA) fell 0.67% to 2394.75p, and Cairn Energy (CNE) gave up 1.11% to 186.5p.
Tullow Oil (TLW) fell 0.16% to 769.75p on announcing that the first exploration well at its PL 507 project offshore Norway has come up dry.
Insurers were prominent fallers with Prudential (PRU), Admiral (ADM) and RSA Insurance (RSA) all softer.
New from Rightmove of a slowdown in UK house prices in June dented the house builders. Barratt Developments (BDEV) dropped 1.73% to 357.3p and Persimmon (PSN) fell 1.18% to 1260p.
Profitable outdoor clothing and footwear designer Fraspens, the third biggest outdoor clothing brand by sales in China, according to Euromonitor, announced its intention to float on the junior AIM market next month.
Acquisitive veterinary surgeries operator CVS (CVSG:AIM) skipped 4.73% higher to 337.5p on a positive year-end update showing like-for-like sales up 6.9% in the year to 30 June.
Branded retail products developer LiteBulb (LBB:AIM) rose 5.68% to 0.93p on news it has bagged over £4 million of orders. New customers include retailers Boots, Next (NXT), Marks & Spencer (MKS) and Sainsbury’s (SBRY).
Mobile money network Monitise (MONI:AIM) rose 0.9% to 42.63p as it extended its global cloud commerce partnership with US IT giant IBM (IBM:NYSE). That was some relief after a revenue warning earlier this month.
Investors seem to be warming to recovery potential at x-ray kit designer Kromek (KMK:AIM) as the dusts settled post its shock profits alert in March. The shares rallied 6.8% to 55p, back beyond 51p IPO price.
Commercial property investor Schroder Real Estate Investment Trust (SREI) gained 1.22% to 52.38p on net assets rising 4.3% to 50.7p a share in Q2.
Brickmaker Michelmersh (MBH) barely budged, up just 0.69% to 73.25p despite interims revealing an 8% rises in revenue and operating margins.
BSkyB slipped 1.58% to 903p on news it has acquired a 70% stake in Love Productions, one of the UK’s leading independent production companies.
Engineering support services group Babcock International rose 0.86% to 1109.5p when it said it remains confident of continued strong progress during this year. Babcock says that across all its businesses, the 2014-15 financial year has started well. It says activity levels remain high and trading is in line with expectations.
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