FTSE close: Morrisons down; BG Group up

By This Is Money
Updated: 12:03 EDT, 19 November 2009

The London market slid rapidly this afternoon as pessimism on Wall Street hit US stocks.

The Footsie lunchtime deficit more than doubled after Wall Street opened sharply lower. The Dow Jones industrial average was down 136.8 points at 10,289.5 by the London close, dragging the FTSE 100 to a 74.4-point loss on the day to 5,267.7.

The fear is spreading that stock valuations have priced in too rapid an economic recovery, some analysts think.

'Negative outlooks from the US software sector and unexpectedly disappointing home stats brought worries about the pace of recovery back to the table,' said Richard Griffiths, senior equity trader at Spreadex.

In London, shares in Morrisons defied a slide for the wider market today as the supermarket's steady sales offset the loss of its chief executive.

Figures showing higher-than-expected public sector borrowing of £11.4bn in October did little for traders' confidence, although there was some cheer for the high street after retail sales volumes grew at their fastest annual rate in 17 months.

'The current view is that the market's somewhat run out of steam... the question is what the next positive catalyst is going to be, and that currently isn't showing itself,' said Richard Hunter, head of UK equities at Hargreaves Lansdown.

At Morrisons, the impact of falling food price inflation left like-for-like sales 4.3% higher in the 13 weeks to November 1 - down from 7.8% previously, but satisfying City hopes.

The shares clawed back to sit 0.11% down after a 5% fall yesterday caused by Mr Bolland's decision to switch to Marks & Spencer. The wider FTSE 100 Index was down 32.4 points at 5309.8 by lunchtime.

Primark owner Associated British Foods lost 6.5p to 825.5p and Tesco lifted 1.45p to 424.8p.

But Marks & Spencer gave back some of the gains made on news of Mr Bolland's appointment, shedding 9.3p to 380.7p despite the better retail news. Credit Suisse also cheered the resolution of the succession issue and lifted its target price on the firm, predicting a better Christmas than last year.

In other sectors brewer SABMiller surged as interim results beat expectations and it said its second half will be helped by more favourable exchange rates.

Shares were 3.44% or 57p higher at 1714p, despite a 26% slide in profits to $1.5bn (£893m), pushing the group to the top of the Footsie risers board. And oil explorer BG Group was higher - up 6.5p to 1131p - after announcing record productivity at its Iracema well in Brazil.

But miners littered the fallers board on the lower commodity prices, led by Antofagasta, which lost 50.5p to 890.5p or 5.4%.

Outside the top flight, Halfords shares were down 3.19% - off 13.8p to 418.2p - despite reporting half-year profits at the top end of market forecasts and forecasting further profits growth in the second half.

Fashion retailer Ted Baker also gave back earlier gains to stand just 1p higher at 450p, even though it said stronger-than-expected UK demand continued to bolster its performance.

ImmuPharma tumbled 19.5% after the company reported interim results for its lead drug Lupuzor - a treatment for Lupus sufferers.

Panmure Gordon commented: 'Although the outcomes were promising, statistical significance was not achieved in the primary end point, which necessitates us to change our forecasts with regards to the phasing of milestone payments.'

However, the brokerage says it remains a buyer of ImmuPharma's stock as it sees a good probability of success in the late stage trials of Lupuzor.

Shares were 26.25p down at 109.75p.

Shares in public relations company Huntsworth gained 0.75p to 65.25p after the firm reported it sees 2009 earnings in line with expectations, prompting KBC Peel Hunt to upgrade to 'buy' from 'hold'.

TOMORROW'S AGENDA

• Chiswick brewer Fuller Smith & Turner reports first-half results.

• Car production figures for October figures will show whether the slump is still easing.

• Engineer Rotork posts interim results