UK stocks snap a five-day winning streak on Wednesday that had sparked the FTSE 100 to a six-week high, as investors turn cautious over a swathe of corporate earnings and await the Bank of England's (BoE) Inflation Report. News of massive fines across the UK banking sector also drag on the Footsie. The benchmark FTSE 100 index drifts 26 points lower to 6,601, having closed at 6,627.4 on Tuesday, its highest since 29 September.
Outsourcing group Capita (CPI) leads the Footsie loser board as the shares plunge close to 8% at £10.35, despite saying it remains on track to achieve at least 8% organic growth for 2014. But the market seems to focusing on news that its finance director Gordon Hurst will leave next year.
Supermarkets giant Sainsbury's (SBRY) is also under the cosh, down 4.5% to 257.1p, as it warns second half profits will be lower than the first and flags a lower full year dividend. Profits guidance reflects CEO Mike Coupe's plans to invest £150 million in price, as well as the first half outperformance of Sainsbury's Bank and cost savings which are unlikely to repeat in H2. Downbeat interims show a 6.3% drop in underlying pre-tax profits to £375 million on like-for-like sales down 2.1% amid relentless competition from the hard discounters, though the interim payout is held at 5p a share.
The Financial Conduct Authority (FCA) has issued its largest ever fine, slapping a £1.1 billion penalty on five banks for rigging forex markets. UK banks Royal Bank of Scotland (RBS) remains flat at 379.9p despite having to pay a £400 million penalty, while HSBC (HSBA) drops 0.8% to 631.8p on a £236 million fine. Banking group Barclays (BARC) drops 2% to 229.8p as it continues negotiations with the FCA.
Moving higher however is security firm G4S (GFS), up 4.3% to 275.9p, on a solid looking interim trading update. Organic revenue is up 4.2% for the nine months to 30 September. It also raised $135 million (£84 million) through the sale of its government solutions business in the US.
Tullow Oil (TLW) is also in demand after saying it is reviewing its costs in light of low international oil prices. It also reassured that its financial performance in the year to date was in line with expectations. The shares rise 1.5% to 489.3p.
Luxury leader Burberry (BRBY) loses 15p at £15.13 despite reasonable half-year results. CEO Christopher Bailey highlights robust 6% pre-tax profits growth to £152 million before the negative impact of exchange rates, though news of wholesale customers are increasingly cautious gives investors the jitters.
Bargain Booze-to-Wine Rack owner Conviviality Retail (CVR:AIM) cheapens 2.5p to 153p on a mixed first half trading update. Though like-for-like sales were 1.7% down, the off-licence chain still expects to achieve full-year profit forecasts and also announces plans to take the Bargain Booze brand into Scotland.
After hunting for a deal all year Essentra (ESNT) has landed a whopper. It is paying $445 million for Clondalkin’s specialist packaging division, funded by debt and an equity raising of about 10% of its share capital. Essentra shares trade 3.3% higher at 737p.
East African focused oil plays Aminex (AEX:AIM) and Solo Oil (SOLO:AIM) gain 6.6% to 1.87p and 8.4% to 0.58p on news a $7 million deal for Aminex to sell 13% of the Kiliwani North licence in Tanzania to Solo is just waiting on approval from the relevant authorities and should close in the near-term.
Kazakh based oil firm Max Petroleum (MXP:AIM) leaps 39.4% to 1.08p as it confirms it has posted a circular in relation to the £37.1 million strategic investment by AGR Energy. It expects to end the review of strategic options and the formal sale process immediately after approval by shareholders at a scheduled AGM on 1 December.
Life sciences specialist Proteome Sciences (PRM:AIM) is one of the largest sliders in early trading falling 20% to 27.3p on a warning that revenues this year will be lower than those recorded in 2013 due to contract delays.