FTSE close: Commodity falls, BT profit

By Ed Monk for Thisismoney.co.uk
Updated: 12:06 EDT, 12 May 2011

17.05 (close)

Taking stock: BT reports today.

The London market sunk deeper into the red today after further falls in commodity prices hit traders' confidence.

The FTSE 100 closed 31 points lower at 5944.96 as mining shares followed the falling price of oil and metals and dragged the market downwards.

In the US, the Dow Jones Industrial Average fell 0.1% as worries over declining crude oil prices were compounded by a job cut warning from communications group Cisco.

The pound was hit by disappointing manufacturing figures, which came in lower than expected. Sterling was down against the US dollar at 1.62 and the euro at 1.14.

Fresnillo was hit by soft silver prices and topped the fallers' board, down nearly 8% or 107p to 1304p, while Antofagasta dropped 47p at 1142p and Vedanta Resources fell 70p to 2095p.

A raft of US economic data failed to lift sentiment, as retail sales posted a below-consensus rise of 0.5% and producer price inflation came in higher than expected at 0.8%.

Oil prices were volatile throughout the session, which saw Petrofac lose 35p at 1449p, BG Group shed 26.5p to 1340.5p and Essar Energy retreat 8.5p to 421.6p.

In corporate results, BT shares were down 2.9p to 199p despite it reporting a 20% rise in adjusted annual profits to £2.1bn in its full-year results.

Investors were bearish even though the company said it expects to grow underlying profits for the next two years and will return to underlying sales growth in 2013.

British Gas owner-Centrica and Scottish & Southern Energy defied the slump in commodity prices to feature near the top of a shortened risers board following takeover speculation.

Centrica, up 6.5p at 318.2p, was again boosted by talk that the Qatari Investment Authority may be eyeing a takeover deal, while SSE benefited from a report that Spanish utility giant Iberdrola is mulling an offer.

SSE fed off the improved sentiment in the industry and advanced 17p to 1368p.

Outside London's top flight, shares in fashion chain SuperGroup lost some of their recent sparkle after sales growth was impacted by its failure to get enough stock into stores to meet demand during the recent heatwave.

Shares topped the FTSE 250 fallers board, down nearly 22%, or 352p to 1222p.

Currys and PC World owner Dixons Retail spared investors another profits warning but warned it expected more tough times ahead.

Dixons, which has 1,200 stores in around 28 countries, continues to expect profits of around £85m for the year to April 30, having issued its second profits alert in as many months at the end of March. Shares were flat at 15.97p.

Embattled retailer Clinton Cards posted another slump in sales but the company's plans for a website and store overhaul swayed investors as the shares reversed earlier losses and added 0.5p to 17p.

The biggest Footsie risers were 3i Group up 18.2p at 289.9p, Centrica ahead 6.5p at 318.2p, Carnival up 52p at 2642p and Tesco ahead 8p at 420.1p.

The biggest Footsie fallers were Fresnillo down 107p at 1304p, Antofagasta off 47p at 1142p, Wood Group down 22p at 653p and Old Mutual off 4.4p at 130.9p.

15.55: Stock markets are ailing as fears about the global economic recovery trigger falls in commodity prices.

The Dow has shed 57.6 points to trade at 12,572.5. A raft of US economic data failed to lift sentiment as retail sales posted a rise of 0.5%, undershooting the consensus forecast, and producer price inflation came in higher than expected at 0.8%.

In London, the FTSE 100 is down 52.3 points at 5,923.7.

Brent crude oil dropped more than 1% to $111 a barrel, which saw Petrofac lose 31p at 1453p, BG Group shed 26.5p to 1340.5p and Essar Energy retreat 8p to 422.1p.

14.45:

The Dow Jones has opened 77.2 points lower at 12,552.9 as risk aversion sets in after recent commodity price falls.

Weekly US jobless claims fell by less than expected, adding to the downbeat mood across the Atlantic.

The FTSE 100 is off 48.3 points at 5,927.8.

13.30:

Tough day for the Footsie so far, with the blue chip index shedding 67.32 points to sit at 5908.68.

The fears over growth have been compounded by disappointing US earnings and the first slowdown in Chinese car sales for more than two years.

In London, mining stocks feature heavily among the losers. The top three top flight fallers are Fresnillo, down 83p to 1328p, Kazakhmys, off 62.5p to 1202.5p, and Antofagasta, which dropped 56.5p to 1132.5p.

12.00:

Dixons has ducked having to issue another profit warning and its UK sales decline has stabilised, but the retailer admitted conditions remain 'challenging'.

The owner of Currys and PC World today stuck with its forecast of £85m in underlying pre-tax profits for the year to April 30, following two profit alerts earlier this year.

The shares are down 0.38p at 15.62p. We have more here.

Meanwhile, embattled retailer Clinton Cards saw its stock fall 0.14p to 16.36p after it said same-store sales across the group declined 3% in the 40 weeks to May 8.

This compared to a 2.7% decline in the first 26 weeks of its financial year.

But Clinton added early trading at the first four redesigned Clinton Cards stores featuring a new layout, colour scheme and signs had been encouraging. Read more here.

And nightclub owner Luminar's shares slipped even lower, but it receives good news from bank backers as they agreed to keep it propped up with cash until the end of August as it struggles with its debt.

Its stock is down 20% to 7.1p.

The FTSE 100 is trading 75.6 points lower at 5,900.4.

Joshua Raymond, market strategist at spreadbetter City Index, commented: 'Most of the stock activity we have seen has been either a direct or indirect reaction to the falls in commodity prices.'

Futures trading points to a lower open on the Dow Jones later. As well as commodity price worries, US investors are digesting a gloomy forecast and news of job cuts from tech giant Cisco Systems.

Brent crude is trading at around $109.50 a barrel and gold was fixed this morning at $1,488.25 an ounce compared with $1,508 at the previous close.

10.50:

SuperGroup shares have taken a real beating this morning as it transpired the fashion retailer missed out on the decent weather we've been having.

It failed to get enough of its summer clothing into stores in time, and sales suffered as a consequence. Stock is down 302p (19.19%) to 1,273p - read more on the story here.

We've got some more on BT, which today said that success in signing up new broadband customers and stringent cost-cutting helped boost annual earnings by 71%.

Shares in BT edged up 0.1p to 202p in morning trading after the telecoms giant racked up a £1.7bn pre-tax profit in the year to March 31, although revenues fell 4% to £20.1bn.

The FTSE 100 is suffering today, now down 61.91 points at 5914.09.

09.45:

The FTSE 100 index followed Asian markets lower today as a reversal in commodity prices triggered another difficult session for investors.

Lingering worries about the global economy and disappointing US earnings combined to put world markets under pressure, with the Dow Jones Industrial Average down 1% overnight and Japan's Nikkei around 1.5% lower.

Mining stocks bore the brunt of London's sell-off as the FTSE 100 Index slipped 45.4 points to 5930.8. Leading top flight fallers included Antofagasta, which dropped 35.5p to 1154p, while Anglo American eased 100.5p to 2890.25p.

Manoj Ladwa, senior trader at etxcapital.com, said: 'With commodities having all but given up their recent gains, natural resource stocks are leading the market lower.'

He added that the next test for investors will come from a raft of American economic data releases, including retail sales figures.

In corporate results, BT shares were flat at 201.9p after it reported a 20% rise in adjusted annual profits to £2.1bn.

Outside London's top flight, shares in fashion chain SuperGroup lost some of their recent sparkle after sales growth was impacted by its failure to get enough stock into stores to meet demand during the recent heatwave.

Shares slumped 15% or 243.5p to 1330.5p.