LONDON MARKETS: FTSE 100 Closes Lower As Burberry Sinks The Most In Five Years
November 09 2017 - 12:25PM
Dow Jones News
By Carla Mozee, MarketWatch
AstraZeneca shares fall after results; Hikma cuts guidance
Blue-chip stocks in the U.K. declined Thursday, as house
builders fell following soft industry figures and as Burberry Group
PLC shares tumbled the most in more than five years after a
disappointing earnings report from the luxury-goods maker.
What markets are doing: The FTSE 100 index lost 0.6% to close at
7,484.10, setting it on track for a 1% weekly loss.
The pound rose to $1.3133, up from $1.3117 late Wednesday in New
York.
Read:Is British leader Theresa May on her way out? Why that's
the fear -- and why it matters
(http://www.marketwatch.com/story/is-british-leader-theresa-may-on-her-way-out-why-thats-the-fear-and-why-it-matters-2017-11-09)
What's moving markets: A widely watched survey on U.K. house
prices showed slowing growth in October compared with September.
The Royal Institution of Chartered Surveyors said its monthly house
price balance dropped 5 points, to plus 1 in October, below a Wall
Street Journal consensus estimate of a reading of plus 3.
"The combination of the increased cost of moving, a lack of
fresh stock coming to the market, uncertainly over the political
climate and now an interest rate hike appears to be taking its toll
on activity in the housing market," said Simon Rubinsohn, RICS's
chief economist.
Retailers were back in focus, with earnings reports in from
Burberry and grocery-chain operator J Sainsbury PLC.
Read:Weak British retail sales flash 'warning sign' for crucial
shopping season
(http://www.marketwatch.com/story/weak-british-retail-sales-flash-warning-sign-for-crucial-shopping-season-2017-11-07)
Stock movers: Burberry shares (BRBY.LN) (BRBY.LN) sank 10%, the
worst drop since September 2012, according to FactSet data, after
the company warned that it doesn't expect sales growth until fiscal
2021
(http://www.marketwatch.com/story/burberry-shares-drop-as-it-warns-on-sales-2017-11-09).
It also said it will sharpen its focus on the high-end market in
part as it aims for high-single digit revenue growth and
"meaningful operating margin expansion".
"By re-energizing our product and customer experience to
establish our position firmly in luxury, we will play in the most
rewarding, enduring segment of the market," said Burberry's Chief
Executive Marco Gobbetti.
Shares of home builders were lower after the RICS survey.
Persimmon (PSN.LN) flopped down 4%, Barratt Developments PLC
(BDEV.LN) dropped 3.6% and Taylor Wimpey PLC (TW.LN) gave up
2.9%.
Shares of Sainsbury (SBRY.LN) (SBRY.LN) ended 1.8% lower after
the supermarkets chain cut its dividend
(http://www.marketwatch.com/story/sainsburys-pretax-profit-drops-41-cuts-dividend-2017-11-09)after
reporting a 41% decrease in pretax profit for the first half of the
year.
AstraZeneca PLC (AZN.LN) (AZN.LN) fell 0.6% even as the
drugmaker said third-quarter operating profit 12% to $1.15 billion
(http://www.marketwatch.com/story/astrazeneca-profit-up-despite-crestor-hit-to-sales-2017-11-09),
boosted by a one-off tax benefit. But product sales fell 3%
stemming from the loss of the company's exclusivity on Crestor and
Seroquel.
Hikma Pharmaceuticals PLC (HIK.LN) (HIK.LN) ended 4.1% lower as
the company cut its guidance for its generics unit for a third
time.
(http://www.marketwatch.com/story/hikma-cuts-guidance-on-generics-unit-for-3rd-time-2017-11-09)
(http://www.marketwatch.com/story/hikma-cuts-guidance-on-generics-unit-for-3rd-time-2017-11-09)Shares
of Randgold Resources Ltd. (RRS.LN)(RRS.LN) fell 0.8% following a
ratings downgrade to neutral from buy at UBS. "We did not see any a
structural negative from RRS disappointing [third-quarter] results,
but we feel less confident that the positive catalysts that we had
expected to drive outperformance will materialize," said UBS.
U.K. growth outlook: The European Commission cut its 2017
forecast for U.K. GDP growth, to 1.5% from 1.8%.
"Economic growth in the U.K. has been slowing since the start of
the year, as higher consumer prices constrained private consumption
growth," the EC said in its autumn economic forecast.
It also expects growth to continue to slow during 2018 and 2019,
with that year possibly posting a 1.1% rate of expansion if there
are no major disruptions to trade as the U.K. exits the European
Union.
(END) Dow Jones Newswires
November 09, 2017 12:10 ET (17:10 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
FTSE 100
Index Chart
From Mar 2024 to Apr 2024
FTSE 100
Index Chart
From Apr 2023 to Apr 2024