UK stocks closed lower on Tuesday as global markets were rattled by increasing regulatory interference from the Chinese authorities.

Better than expected consumer confidence data in the US wasn’t enough to prevent stocks retreating across the board with the Nasdaq 100 falling close to 2% in early trading ahead of earnings updates from big tech heavyweights Microsoft and Alphabet after the close.

At the UK market close the FTSE index of leading shares was down 0.4% to 6,996.

CORPORATE NEWS

Scottish Mortgage Trust (SMT), one of Britain’s biggest investors in innovative giants such as Tencent and Alibaba, was caught in the fall-out from Beijing’s assault as its shares fell 3.3% to £12.91.

There were odd bright spots, notably specialty chemicals group Croda (CRDA), which saw its shares rally 5.6% to £82.66 after it said full year profits were now expected to be significantly ahead of expectations. This follows a 39% rise in half year revenues and a 42% increase in operating profits, with business boosted by its contract to supply vaccine maker Pfizer.

MARKET DRAGS

Reckitt Benckiser (RKT), which sells Nurofen painkiller and Dettol cleaner, tumbled 7.6% to £56.52, having swung to a £1.94 billion first-half loss on lower revenue and a write-down on Chinese infant formula assets.

The company stoked fears of rising supply constraints in the economy by warning that its margins would fall for the full year. It held its interim dividend steady at 73p per share.

Online greeting cards and gifts group Moonpig (MOON) slumped 9.3% to 385p, despite posting a 3.4% rise in pre-tax annual profit.

Moonpig’s underlying profit jumped 41% after its revenue more than doubled, though it forecast revenue to fall substantially this year as conditions normalise following the end of lockdowns.

Banking group Virgin Money (VMED) added 2% to 197.7p after it upgraded annual margin guidance after boosting mortgage lending volumes in its third quarter.

Virgin Money forecast its net interest margin for the full year to be modestly ahead of 160 basis points, having risen to 168 basis points in the third quarter.

Convenience foods manufacturer Greencore (GNC) gained 3.3% to 133.2p after upgrading its annual revenue forecast following a strong third quarter.

Greencore now expects to generate a fiscal 2021 adjusted operating profit outturn of between £36 million and £40 million, versus previous guidance of £32.5 million.

ELSEWHERE ON THE MARKET

Bus and train company FirstGroup (FGP) dipped 0.2% to 84.3p despite swinging to a £115.8 million annual profit, after cost cuts and government subsidies helped buffer it from a pandemic-led slump in demand.

Looking ahead, FirstGroup said it expected volumes to recover to between 80% and 90% of pre-pandemic levels during the first year after social distancing restrictions on public transport end.

Gambling technology group Playtech (PTEC) slipped 0.9% to 377.2p on announcing that it performed in line with expectations in the first half, as online strength offset weakness at its Italian retail business.

Daily Mirror publisher Reach (RCH) jumped 6.7% to 334p, despite posting a loss owing to a large tax bill, after it saw its first-half revenue rise 4%. Reach also reinstated its interim dividend at 2.75p per share.

Door and window components supplier Tyman (TYMN) shed 1% to 445.5p even as it reinstated its interim dividend after its first-half profit more than doubled on a rebound in sales.

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Issue Date: 27 Jul 2021