Despite initial enthusiasm over 'Freedom Day' on Monday and buying of retail, hospitality and travel and leisure stocks, the FTSE turned south on Friday afternoon as concerns re-emerged over the strength of the US economy.
US markets compounded Thursday's losses, with the S&P500 index and the Nasdaq both down around 0.3% despite strong retail sales data for June.
Oil remained weak, with Brent crude futures losing 0.3% to $73.3 per barrel, while gold was 0.4% lower at $1,823 per ounce.
By the close the FTSE 100 index of leading shares was 4 points lower on the day at 7,008 points, having dipped below the 7,000 level shortly before the bell.
CORPORATE ROUND UP
Shares in international sales, marketing and support services group DCC (DCC) climbed 2% to £58.90 after the company said first quarter operating profit growth was well ahead of the prior year and modestly above consensus analyst expectations.
The key drivers were strong growth in health and beauty solutions and technology. The company expects to deliver strong operating profit growth for the full year to 31 March 2022.
Multinational packaging business DS Smith (SMDS) announced the proposed sale of its De Hoop paper mill in the Netherlands to De Jong Packaging, in a cash deal worth €50m, or £43m.
The company said the proceeds will be used partly to offset this year’s investments into greenfield corrugated box plants in Italy and Poland, and expansion of its Arnstat packaging facility in Germany. The shares dipped 0.5% to 415p.
DISAPPOINTMENT
Shares in pharmaceutical giant AstraZeneca (AZN) dropped 0.5% to £83.46 after the US Food and Drug Administration advisory committee's voted 12 to 2 against approving the company's drug to treat anaemia in chronic kidney disease in non-dialysis dependent adult patients.
The FDA isn't not bound by the Committee's recommendation, but will consider the vote, independent opinions, and recommendations from experts.
FOREIGN EXCHANGE HEADWIND
Global luxury brand Burberry (BRBY) said it saw a strong recovery in the first quarter to 26 June with comparable store sales in line with pre-pandemic levels.
Comparable store sales rebounded strongly showing 90% growth year-on-year and 1% versus fiscal 2020, while full price sales growth accelerated to 26% driven by a new younger cliental.
The company maintained medium term guidance for high single digit revenue growth and margin improvement, but said it expected a foreign exchange headwind of £114 million on sales and £40 million on adjusted operating profit. The shares fell 4.8% to £20.70.
Real estate investment company Segro (SGRO) has agreed to sell a portfolio of six Italian urban warehouses for £127.5m to AXA Investment Managers, on behalf of its clients.
According to the company, the warehouses were developed by Segro-Vailog for a global online retail company to support the growth of its distribution network in Italy. The shares gained 0.5% to £11.73.
Iron ore and copper miner Rio Tinto (RIO) said first half production of iron ore at its Pilbara mine was impacted by materially higher rainfall and Covid restrictions.
Second quarter iron ore production fell 9% to 75.9 million tonnes and copper production fell 13% to 115.5 thousand tonnes. The shares dropped 3.4% to £59.31 as materials stocks came under pressure on Wall Street.
In a trading update international home repairs and improvements company Homeserve (HSV) said product usage remained ‘strong’ across the business for the period 1 April to 15 July, with claims frequencies in membership and consumer usage in home experts still high.
The company maintained full year guidance and said it remained confident in the group’s prospects and expects to deliver an acceleration in performance in FY22 compared to FY21. The shares added 3.2% to 936p.
SLEEPLESS NIGHT
Shares in direct-to-consumer sleep and wellness company Eve Sleep (EVE:AIM) dropped 13% to 3.8p after highlighting second half disruption to the business from component shortages and raw material price inflation.
The company said first half revenues grew 13% to £13.9 million and losses in line with management expectations.
