Sainsbury's drop, miners weigh on FTSE
Reuters
Published May 03, 2017 17:11
Sainsbury's drop, miners weigh on FTSE
By Danilo Masoni and Kit Rees
LONDON (Reuters) - Britain's top share index fell on Wednesday, weighed down by weaker commodity stocks, while supermarket Sainsbury's (L:SBRY) dropped after an underwhelming earnings update.
The blue chip FTSE 100 (FTSE) was down 0.2 percent at 7,234.53 points at its close, broadly in line with weakness seen elsewhere in Europe.
Sainsbury's was the biggest blue chip faller, sinking almost 6 percent after the grocer reported a third straight year of underlying profit decline, despite the boost to earnings from last year's purchase of Argos, the general merchandise retailer.
"Today’s results from Sainsbury show some promising early signs from the Argos acquisition set against a difficult trading environment for food retailing,” Simon Gergel, CIO UK Equities at Allianz (DE:ALVG) Global Investors, said.
Sainsbury's, which trails market leader Tesco (L:TSCO) in annual sales, cautioned that it saw no let-up in the intensely competitive UK market any time soon. Tesco's shares also fell 3.4 percent.
The biggest sectoral weight to the FTSE were mining stocks, which wiped about 12.5 points from the blue chip index.
Heavyweight miners Glencore (L:GLEN), Anglo American (L:AAL) and Rio Tinto (L:RIO) all dropped between 2.7 percent to 3.7 percent, after copper prices fell as the dollar ticked higher on expectations the Federal Reserve will signal a June rate rise later in the session. [MET/L]
BP (L:BP) was among the biggest individual drags to the index with a 0.7 percent fall following the strong gains it made in the previous session after a better than expected earnings update.
Earnings boosted top gainers, however, with accounting software firm Sage Group (L:SGE) rising 3.4 percent after reporting first-half earnings and saying it was confident that it would exceed its full year guidance for revenue growth.
British equities were little moved by data showing growth in the country's construction industry accelerated in April, adding to tentative signs that the economy might be recovering a little momentum after a lacklustre start to 2017.
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British mid caps also continued to trade in the red and ended the session 0.6 percent lower.
But Mitie (L:MTO) outperformed, up 9.4 percent, after the pest control company reported steady revenues and unveiled the results of a review of its accounts.
Construction group Galliford Try (L:GFRD) fell 10.7 percent after the company warned on charges for construction business.
Written By: Reuters
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