UK stocks snap a five day winning streak in early deals Wednesday, pulling back from their highest level in nearly two months. Investors are turning cautious ahead of minutes of the latest Bank of England (BoE) and Federal Reserve meetings. The FTSE 100 slips 12 points, or about 0.2%, lower at 6,696 in early trading with heavy falls from blue chips Royal Mail (RMG) and outsourcing group Intertek (ITRK) providing a drag. The index finished at 6,671.97 on Tuesday, its highest close since 22 September when it settled at 6,773.63.
Disappointing interims send Royal Mail 2.9% lower to 456p. Analysts at Investec Securities say the statement is a mixed bag. Letters performed better than expected but parcels are now expected to grow at just 1% to 2% over the next few years because of pressure from a raft of new competitors distributing Amazon (AMZN:NDQ) products.
Quality and safety solutions provider Intertek slides 7% to £24.64 as it says organic sales are unlikely to grow in its 2014 financial year. Revenues, excluding the impact of acquisitions, declined 0.7% for the 10 months to end-October.
Pub groups are also struggling against hefty losses after MPs voted to scrap the so-called 'beer tie', which links landlords' rent and supplies to their parent pub companies. The boss of Enterprise Inns (ETI), whose shares slump 13%, says the amendment to the bill will have 'serious unintended consequences' on the industry, including job losses and pub closures. UK pub group Punch Taverns (PUB) is also a heavy faller, slumping 9% to 137.25p, although rival JD Wetherspoon (JDW) is only barely in the red, off just 2p at 798p.
Premium branded cookers specialist AGA Rangemaster (AGA) feels the heat, falling 9.5% to 122p, as its latest trading statement triggers profit downgrades. In the 20 weeks since the half-year the UK businesses have performed well, though a mixed performance in Europe, where French-based furniture business Grange and Irish stoves specialist Waterford Stanley are struggling, will temper overall growth this year.
Mid cap oil explorer Cairn Energy (CNE) falls 3% to 181p as it concludes its Senegal drilling programme without uncovering oil in the deeper targeted areas. Cairn, which owns a 40% working interest in three blocks off the coast of the West African country, says its joint venture partners have completed operations on the SNE-1 well and plans are now in motion to appraise the discovery made in a shallower reservoir in 2015.
Project delays put the squeeze on revenues at crowd sourcing platform operator Blur (BLUR:AIM), the shares 16% crash to 61.5p among the biggest AIM fallers on Wednesday. But the company does point to strong growth in bookings and says it remains on track to breakeven in the fourth quarter of 2015.