UK stocks erase losses, but corporate earnings weigh on sentiment

Sharecast

LONDON (ShareCast) - - Stocks snap winning streak but pare losses by the close
- Tate & Lyle (LSE: TATE.L - news) , Rolls-Royce issue profit warnings
- Lloyds underwhelms with higher profits in 2013
- US retail sales disappoint

techMARK 2,823.82 -0.26%
FTSE 100 6,659.42 -0.23%
FTSE 250 16,029.39 -0.31%

Profit warnings from Tate & Lyle and Rolls-Royce and an underwhelming set of results from Lloyds weighed on UK markets today, which finished lower after six straight days in positive territory.

"After the gains of the last few days markets are once again focussing on the underlying weakness of company earnings and not really liking what they are seeing," said Chief Market Analyst Michael Hewson from CMC Markets.

Worse-than-expected US retail sales data also dampened sentiment today, with economists now raising concerns over economic growth estimates in the States for the fourth quarter.

US retail sales fell by 0.4% in January, while downwards revisions were made to forecasts for December and November, which "suggest[s] notably softer growth in fourth-quarter consumption than initially estimated", said Analyst Peter Newland from Barclays (LSE: BARC.L - news) .

Nevertheless, Wall Street stocks pushed higher after the opening bell, helping the FTSE 100 to erase most of its losses by the close to finish down just 15.61 points (-0.23%) at 6,659.42. The index pulled back after hitting its best closing level since January 23rd on Wednesday, but ended well above the intraday low of 6,608.09 reached earlier this afternoon.

In other news, the Bank of England's Chief Economist Spencer Dale said that expectations for a rate hike in 2015 are "reasonable". This follows the central bank's Inflation Report yesterday, in which Governor Mark Carney completely revamped his forward guidance plan.

Tate & Lyle, Rolls-Royce, Lloyds and Rio provide a drag

Food and sweetener company Tate & Lyle was down 16% despite saying it expects full-year profits to be broadly in line with the previous year as Sucralose pricing pressures have intensified in the final quarter. The company had previously said that it expected "another year of profitable growth".

Aerospace and defence group Rolls-Royce also dropped 14% after revealing that 2014 revenue and profit is expected to be flat due to cuts in government defence spending, implying a reduction to current consensus forecasts. Defence groups Meggitt (Other OTC: MEGGF - news) and BAE Systems (LSE: BA.L - news) were also lower.

Banking group Lloyds fell despite swinging to a statutory profit before tax of £415m during 2013, from a loss of £606m the year before. However, the company came under fire for an 8% increase in its bonus pool, with Chief Executive António Horta-Osório having to defend his £1.7m payout.

Rio Tinto (Xetra: 855018 - news) also fell after underwhelming with a 10% increase in underlying earnings in 2013 and a 15% rise in the dividend. Mining (LSE: MIR.L - news) peers Glencore Xstrata (Other OTC: GLCNF - news) and Antofagasta (Other OTC: ANFGF - news) were also under the weather, while Randgold gained as gold and silver prices advanced.

Aberdeen was in the red after the asset manager was downgraded from 'hold' to 'underperform' by Jefferies, which said that the recent acquisition of Scottish Widows Investment Partnership will not compensate for the slowdown in the group's main equities business.

Leading the upside was Imperial Tobacco (LSE: IMT.L - news) after first-quarter underlying tobacco net revenue rose 1% to £1.56bn, helped by its key Growth Brands. Cigarettes and tobacco rival British American also finished higher.

UK oil and gas engineer AMEC (Other OTC: AMCBF - news) was also making gains after an in-line 2013 report, in which adjusted earnings per share rose 11% despite a 3% dip in revenues. The company also announced a firm offer for Swiss rival Foster Wheeler (NasdaqGS: FWLT - news) .

FTSE 100 - Risers
Imperial Tobacco Group (IMT) 2,351.00p +5.66%
International Consolidated Airlines Group SA (CDI) (IAG) 442.00p +2.89%
British American Tobacco (LSE: BATS.L - news) (BATS) 3,052.00p +1.90%
Randgold Resources Ltd. (RRS) 4,687.00p +1.49%
Rexam (Frankfurt: RXM1.F - news) (REX) 515.50p +1.48%
ARM Holdings (LSE: ARM.L - news) (ARM) 937.50p +1.35%
Legal & General Group (LGEN) 235.50p +1.33%
AstraZeneca (EUREX: AZNF.EX - news) (AZN) 4,055.50p +1.32%
SSE (Berlin: SCT.BE - news) (SSE (LSE: SSE.L - news) ) 1,377.00p +1.25%
Whitbread (Frankfurt: WHF4.F - news) (WTB) 4,083.00p +1.19%

FTSE 100 - Fallers
Tate & Lyle (TATE) 660.00p -16.08%
Rolls-Royce Holdings (RR.) 1,045.00p -13.64%
Aberdeen Asset Management (Other OTC: ABDNF - news) (ADN) 408.20p -4.54%
Tullow Oil (LSE: TLW.L - news) (TLW) 758.50p -4.29%
BAE Systems (BA.) 425.80p -3.12%
Lloyds Banking Group (LLOY) 81.32p -2.65%
Antofagasta (LSE: ANTO.L - news) (ANTO) 905.50p -2.37%
Meggitt (Frankfurt: MGI.F - news) (MGGT) 523.00p -1.78%
G4S (Copenhagen: G4S.CO - news) (GFS) 228.70p -1.76%
William Hill (Other OTC: WIMHF - news) (WMH) 347.20p -1.73%

FTSE 250 - Risers
African Barrick Gold (LSE: ABG.L - news) (ABG) 272.90p +8.29%
IP Group (LSE: IPO.L - news) (IPO) 196.50p +5.08%
Dunelm Group (LSE: DNLM.L - news) (DNLM) 914.00p +3.28%
Keller Group (LSE: KLR.L - news) (KLR) 1,224.00p +2.86%
Riverstone Energy Limited (RSE) 930.00p +2.76%
Essentra (LSE: ESNT.L - news) (ESNT) 851.50p +2.65%
Euromoney Institutional Investor (ERM) 1,287.00p +2.63%
Entertainment One Limited (LSE: ETO.L - news) (ETO) 334.00p +2.30%
Rank Group (RNK) 143.60p +2.28%
Britvic (Munich: B6S.MU - news) (BVIC) 733.50p +2.23%

FTSE 250 - Fallers
Essar Energy (LSE: ESSR.L - news) (ESSR) 60.00p -4.76%
Lancashire Holdings Limited (Other OTC: LCSHF - news) (LRE) 722.00p -4.37%
Cairn Energy (LSE: CNE.L - news) (CNE) 192.20p -3.71%
Ladbrokes (Frankfurt: LADA.F - news) (LAD) 145.70p -3.64%
Moneysupermarket.com Group (MONY) 172.30p -3.47%
Evraz (LSE: EVR.L - news) (EVR) 83.80p -3.12%
Telecity Group (LSE: TCY.L - news) (TCY) 641.00p -2.88%
Senior (SNR) 290.60p -2.81%
Home Retail Group (Frankfurt: PZR.F - news) (HOME) 187.00p -2.76%
Man Group (Other OTC: MNGPF - news) (EMG) 82.25p -2.37%

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