London close: Stocks fall one per cent on earnings, taper fears


LONDON (ShareCast) - - Perform plummets after profit warning
- Sports Direct (Dusseldorf: ZVX.DU - news) and Wood Group (Frankfurt: JWG1.F - news) fall sharply after results
- Taper bets increase ahead of Fed meeting, US data in focus
- FTSE 100 at lowest level since mid-October

techMARK 2,652.61 -0.83%
FTSE 100 6,445.25 -0.96%
FTSE 250 15,211.54 -1.20%

The FTSE 100 finished one per cent lower on Thursday as disappointing corporate updates and increased bets about a tapering of stimulus in the States prompted investors to scale back risk appetite.

Sharp falls from Sports Direct and Wood Group, along with a profit warning from Perform Group (Frankfurt: 8PG.F - news) , helped to dampen sentiment in London today, with the UK's benchmark index closing at its lowest level in over two months.

The Footsie ended 62.47 points down at 6,445.25 after a weak start on Wall Street this afternoon. London's benchmark index has not closed below its current level since October 10th when it finished at 6,430.49.

Nevertheless, analysts at Capital Economics see the FTSE 100 outperforming over the next few years due to a weaker pound and a cyclical rebound in profits, following its underperformance in 2013. In fact, they see the index hitting 7,500 by 2015, whereas the S&P 500 will "struggle from here" reaching just 1,850 by that time.

A budget deal in Washington signed on Tuesday night was met with a mixed reaction on markets yesterday. While the agreement looks to ease spending cuts over the next two years and reduces the potential for political brinkmanship, many believe that it removes yet another obstacle standing in the way of the Fed's decision to taper following the strong labour-market figures out last week.

"In a rather dramatic shift in sentiment, market participants are starting to see that the possibility of the Federal Reserve tapering stimulus at next Wednesday's Federal Open Market Committee meeting is gaining in credibility," said Max Cohen, Financial Sales Trader at Spreadex.

Perform plummets; Sports Direct and Wood Group under pressure

Sports media group Perform plummeted after warning that its 2013 full-year revenue will be below previous expectations, pushing earnings "significantly" below forecasts. The warning, which also revealed results for 2014 are now set to miss expectations, more than halved the value of the company's stock by the close.

Sportswear and equipment retailer Sport Direct slumped despite delivering a near-17% jump in underlying profits during its first half, as it cautioned that "[current] trading has now reverted to management's original expectations" following the outperformance in the first half. The company also revealed that long-running Finance Director Bob Mellors, who was appointed in 2004, is to retire at the end of December on health grounds.

Energy services firm Wood Group disappointed after saying that trading remaining mixed across its three main divisions. While it reiterated guidance for overall growth in 2013 and 2014, it said its engineering division would see a 15% drop in operating profits next year. Sector peers AMEC (Other OTC: AMCBF - news) and Petrofac (Berlin: P2F.BE - news) fell in sympathy.

After a heavy fall early on, fashion retailer SuperGroup (Other OTC: SEPGF - news) erased losses as a strong first-half report came alongside the warning that comparatives for the third quarter "are more challenging than those experienced so far this year".

Mining (LSE: MIR.L - news) stocks were under the weather as investors scaled back risk appetite and as metal prices declined across the board. Fresnillo (Other OTC: FNLPF - news) , Vedanta, Randgold and African Barrick Gold (LSE: ABG.L - news) all finished with heavy losses.

Imagination Technologies (Other OTC: IGNMF - news) was extending losses today after a sharp fall the day before as it gave a gloomy outlook for the high-end smartphone market in its fiscal second half.

Utilities stocks were performing relatively well amid the wider market weakness, helped by positive comments from analysts at JPMorgan Chase & Co (NYSE: JPM - news) and Standard & Poor's on UK regulation. United Utilities (LSE: UU.L - news) , National Grid (LSE: NG.L - news) , Pennon, Centrica (LSE: CNA.L - news) and Severn Trent (Other OTC: STRNY - news) were all in demand.

FTSE 100 - Risers
United Utilities Group (UU.) 655.50p +1.71%
TUI Travel (LSE: TT.L - news) (TT.) 379.40p +0.66%
National Grid (NG.) 750.00p +0.54%
Croda International (Other OTC: COIHF - news) (CRDA) 2,276.00p +0.35%
Sage Group (LSE: SGE.L - news) (SGE) 373.40p +0.35%
AstraZeneca (Berlin: ZEG.BE - news) (AZN) 3,458.00p +0.32%
Severn Trent (SVT) 1,674.00p +0.30%
International Consolidated Airlines Group SA (CDI) (IAG) 370.00p +0.27%
Standard Chartered (HKSE: 2888.HK - news) (STAN) 1,293.50p +0.23%
Centrica (Frankfurt: CENB.F - news) (CNA) 325.10p +0.18%

FTSE 100 - Fallers
Sports Direct International (Other OTC: SDIPF - news) (SPD) 674.00p -12.58%
Fresnillo (Berlin: FNL.BE - news) (FRES) 716.00p -5.23%
Amec (AMEC) 1,049.00p -4.98%
Vedanta Resources (Other OTC: VDNRF - news) (VED) 779.50p -4.00%
Petrofac Ltd. (PFC) 1,142.00p -3.95%
Mondi (MNDI) 904.50p -3.88%
Randgold Resources Ltd. (RRS) 3,896.00p -3.83%
Aberdeen Asset Management (Other OTC: ABDNF - news) (ADN) 447.40p -3.78%
Persimmon (PSN) 1,136.00p -3.15%
Coca-Cola HBC AG (CDI) (CCH) 1,634.00p -3.14%

FTSE 250 - Risers
AL Noor Hospitals Group (ANH) 966.00p +7.93%
CSR (Frankfurt: GQY.F - news) (CSR (LSE: CSR.L - news) ) 580.00p +5.65%
NMC Health (LSE: NMC.L - news) (NMC) 435.00p +5.05%
Ted Baker (Other OTC: TBAKY - news) (TED) 2,241.00p +3.80%
Kenmare Resources (LSE: KMR.L - news) (KMR) 19.67p +3.53%
Dialight (DIA (Berlin: DI6.BE - news) ) 851.00p +3.53% Digital Entertainment (BPTY) 117.10p +2.18%
Ocado Group (Other OTC: OCDGF - news) (OCDO) 409.80p +1.86%
AZ Electronic Materials SA (DI (KSE: 003160.KS - news) ) (AZEM) 390.00p +1.69%
Xaar (Berlin: XAR.BE - news) (XAR) 1,162.00p +1.57%

FTSE 250 - Fallers
Perform Group (PER) 180.00p -57.85%
Imagination Technologies Group (IMG) 169.50p -10.79%
Wood Group (John) (WG.) 718.00p -9.91%
African Barrick Gold (ABG) 157.80p -4.94%
Oxford Instruments (LSE: OXIG.L - news) (OXIG) 1,647.00p -4.02%
Halfords Group (LSE: HFD.L - news) (HFD) 447.50p -3.76%
Hunting (HTG) 760.50p -3.67%
Computacenter (CCC) 651.00p -3.48%
Evraz (LSE: EVR.L - news) (EVR) 98.10p -3.35%
Laird (LRD) 252.60p -3.07%


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