UK stocks regained some poise Tuesday lunchtime, recovering steep early losses as global markets were spooked by a Chinese crackdown on education, food delivery and property companies and worries state intervention could be extended to the technology sector.

At 12pm the FTSE index of leading shares was down 0.4% to 7,000 points.

DOWNDRAFT

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 1.8% to £13.12.

There were odd bright spots, notably speciality chemicals group Croda (CRDA), which saw its shares rally 6.2% £83.08 after it said full year profits were now expected to be significantly ahead of expectations.

That followed 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

Consumer goods giant Reckitt Benckiser (RKT), which sells Nurofen pain killer and Dettol cleaner, tumbled 10% to £56.10, having swung to a £1.94 billion first-half loss on lower revenue and a write-down on Chinese infant formula assets.

Of greater concern, the company warned that its margins would fall for the full year due to accelerating cost inflation and a delay in raising prices to consumers. It held is interim dividend steady at 73p per share.

Online greeting cards and gifts group Moonpig (MOON) slumped 9.4% to 384.6p, 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 (VMUK) added 1.1% to 195.1p as it upgraded its annual margin guidance after boosting mortgage lending volumes in the third quarter.

The group 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 3.8% to 133.8p 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) advanced 2.9% to 86.9p as it swung 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%-to-90% of pre-pandemic levels during the first year after social distancing restrictions on public transport end.

Gambling technology group Playtech (PTEC) slipped 0.5% to 378.8p on announcing that it had 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 6.1% to 332p, 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 0.3% to 448.5p 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