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London open: Diageo leads stocks lower ahead of Easter weekend

Thu, 17th Apr 2014 08:26

- Ukraine crisis in focus as leaders meet in Geneva- US data, corporate earnings closely watched- Diageo drops as weak Q3 dampens growthtechMARK 2,653.18 +0.06%FTSE 100 6,565.34 -0.29%FTSE 250 15,771.90 +0.16%UK stocks fell on Thursday morning as investors adopted a cautious stance ahead of the four-day weekend amid ongoing turmoil in Ukraine.Diageo was weighing heavily on markets in London early on after the beverages group reported a decline in sales in the third quarter.The FTSE 100 was trading around 0.3% lower at 6,565 in early trading. Markets will be closed for Good Friday and Easter Monday so volumes are likely to remain low over the course of the session, according to analysts."Global indices seem undecided as to whether they are actually ready to start moving back towards the highs seen back in February or else continue to correct lower which has been a running theme of the past fortnight," said Research Analyst Joshua Mahony from Alpari UK.Talks in Geneva between the US, Russia and Ukraine and the EU will be high on the agenda for global financial markets today, but the potential for more aggressive sanctions on Moscow may be limited given warnings from blue chip firms that they could affect business.Companies such as German chemical group BASF, Italian energy firm Eni and British oil major BP have all expressed their caution to governments about the fall-out from tougher sanctions and any possible retaliation from the Kremlin. Tensions along the eastern border of Ukraine have escalated in recent days due to the occupation of government buildings by pro-Russian militants. Three pro-Russian separatists were reportedly killed overnight, according to Ukraine's Interior Minister.US stocks closed higher for the third day in a row on Wednesday as positive data from the Federal Reserve's 'Beige Book', which showed receding winter snow had revealed buds of economic activity in 10 out of its 12 regions across the country. Fed Chair Janet Yellen also said in a speech that the central bank is committed to keep its accommodative stance.Crowd-pleasing earnings from stocks such as Yahoo! and Intel also helped to lift sentiment on Wall Street. However, Google tumbled in after-hours trading as first-quarter revenue and earnings fell short of analyst expectations, with paid clicks also declining from the last quarter of 2013.Economic data is likely to be on the light side today, with few major indicators due for release. Initial jobless claims and the Philadelphia Fed manufacturing index will be in focus later on for US markets.Meanwhile, US corporate earnings will be in focus with a number of heavyweights including Morgan Stanley, Goldman Sachs, Honeywell, Baker Hughes and General Electric due to report.Diageo sinks as sales falterYear-to-date organic revenue growth at Diageo has been held back by a sales decline in the third quarter due to weakness across many emerging markets, causing shares to drop this morning. The company, famous for brands such as Captain Morgan, Smirnoff and Guinness, said that organic net sales fell by 1.3% in the three months to March 31st. As a result, overall growth over the first nine months of Diageo's financial year was just 0.3%, down from 2% in the first half.Residential development group Taylor Wimpey rose after saying that the UK housing market remains buoyant as demand continues to be boosted by the more accessible and affordable mortgage market. RSA Insurance gained after selling off its Baltics and Polish businesses as newly-appointed Chief Executive Stephen Hester attempts to turn around the embattled insurer. The FTSE 100 group has reached agreement in four transactions, which if they complete will reap a total cash consideration of approximately €360m (£300m).Royal Dutch Shell edged higher following an exploration discovery offshore Malaysia. The Rosmari-1 well, located 135km offshore in Block SK318, encountered more than 450 metres of gas column after being drilled to a total depth of 2,123 metres.Luxury handbag and fashion group Mulberry fell sharply after it issued a new profit warning, its fourth in two years, as it battles against dwindling sales and increased competition. Larger high-end peer Burberry, which impressed the market with a second-half trading update yesterday, fell in sympathy this morning.FTSE 100 - RisersRSA Insurance Group (RSA) 95.10p +2.70%ITV (ITV) 184.00p +2.22%ARM Holdings (ARM) 943.00p +1.18%Barratt Developments (BDEV) 368.90p +1.07%Whitbread (WTB) 3,940.00p +1.03%Sports Direct International (SPD) 795.50p +1.02%Admiral Group (ADM) 1,355.00p +0.97%Legal & General Group (LGEN) 209.70p +0.91%BT Group (BT.A) 365.10p +0.86%St James's Place (STJ) 764.50p +0.86%FTSE 100 - FallersDiageo (DGE) 1,819.00p -4.26%Fresnillo (FRES) 861.00p -2.60%Burberry Group (BRBY) 1,437.00p -1.98%Unilever (ULVR) 2,581.00p -1.56%GlaxoSmithKline (GSK) 1,545.00p -1.18%SABMiller (SAB) 3,006.50p -1.17%Rio Tinto (RIO) 3,268.00p -1.13%Tesco (TSCO) 290.80p -1.02%William Hill (WMH) 317.50p -1.00%BHP Billiton (BLT) 1,890.50p -0.99%FTSE 250 - RisersBank of Georgia Holdings (BGEO) 2,638.00p +4.06%PayPoint (PAY) 1,184.00p +2.33%Thomas Cook Group (TCG) 167.20p +1.89%Redrow (RDW) 290.40p +1.75%Ocado Group (OCDO) 339.50p +1.65%Fenner (FENR) 393.30p +1.50%Heritage Oil (HOIL) 256.40p +1.42%WH Smith (SMWH) 1,101.00p +1.38%Mitchells & Butlers (MAB) 451.80p +1.32%Partnership Assurance Group (PA.) 128.80p +1.26%FTSE 250 - FallersSynergy Health (SYR) 1,211.00p -3.04%Polymetal International (POLY) 602.50p -1.95%Debenhams (DEB) 79.90p -1.36%Vedanta Resources (VED) 905.50p -1.25%Hunting (HTG) 832.50p -1.25%Petra Diamonds Ltd.(DI) (PDL) 148.30p -1.13%COLT Group SA (COLT) 143.30p -1.10%Diploma (DPLM) 676.50p -1.10%Kazakhmys (KAZ) 236.00p -1.09%Tate & Lyle (TATE) 648.00p -1.07%BC
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