Saga Share News (SAGA)

LONDON (Alliance News) - Stocks in London continued to slide at midday on Tuesday, hamstrung by a second session of losses for Royal Mail in conjunction with Ferguson's fall."Normally when the FTSE is in such a state the pound tends to be in the green. Not so on Tuesday, with an unexpected, Brexit-concerned drop in September's construction PMI helping to drag the currency lower," commented Spreadex analyst Connor Campbell.The pound was also experiencing a poor session due to poor UK's construction sector data.The FTSE 100 was down 0.5%, or 34.52 points, at 7,461.15 at midday. The FTSE 250 declined 0.6%, or 127.82 points, to 20,273.39 while the AIM All-Share was 0.7% lower at 1,093.78.The Cboe UK 100 was down 0.6% at 12,655.08. The Cboe UK 250 was 0.7% lower at 18,393.13 and the Cboe UK Small Companies down 0.1% at 12,125.86."The relief following the new NAFTA deal did not last long. A day after Canada and US finally clinched a trade deal European and some Asian markets are back in negative territory. Expectations that the agreement would somehow translate into the easing of trade tensions with China proved wishful thinking," said Fiona Cincotta, senior market analyst at City Index. Sterling was quoted at USD1.2944 following the latest construction Purchasing Managers' Index, lower compared to USD1.3040 at the London equities close on Monday.The latest IHS Markit/CIPS survey said the UK construction PMI fell to 52.1 from 52.9 in August. The index had been expected to ease less dramatically to 52.5.While any reading above 50 indicates expansion in the sector, the score marked the weakest pace of growth in six months in September as all three sub-sectors lost momentum.Civil engineering was the worst performing sub-sector while activity growth slowed in house building and commercial construction. New work and employment grew robustly, while business optimism was at the second-lowest level since February 2013."The drop in the construction PMI to a six-month low in September indicates that the sector's revival over the summer largely was driven by the displacement of activity from earlier in the year due to the bad weather," commented Samuel Tombs, chief UK economist at Pantheon MacroeconomicsIn mainland Europe, the CAC 40 in Paris was 0.9% lower at midday while Frankfurt's DAX 30 was down 0.8%.Official data from Eurostat showed eurozone producer price inflation slowed for the first time in four months during August, rising 4.2% year-on-year following 4.3% in July, which was revised from 4%. Economists had expected a 3.8% increase.Taking cues from European peers, Wall Street is facing a lower open on Tuesday, with the Dow Jones and S&P 500 both pointed down 0.4% and the Nasdaq set to shed 0.6%.Before the US market open, drink and snacks maker PepsiCo said its third quarter profit rose to USD2.50 billion from USD2.14 billion a year ago. The company's revenue for the quarter rose 1.5% to USD16.49 billion from USD16.24 billion last year.Federal Reserve Chair Jerome Powell speaks at 1745 BST on 'The Outlook for Employment and Inflation' at the 60th National Association for Business Economics in Boston.Remaining the FTSE 100's worst performer on Tuesday was Royal Mail, down 8.8% at 357.66 pence by midday following an afternoon profit warning on Monday.Royal Mail shares hit an all-time low of 350.60p earlier in Tuesday's session.The postal operator tumbled 18% on Monday after revising its adjusted operating profit before transformation costs down to between GBP500 million and GBP550 million for its financial year ended March. This compares to a GBP694 million adjusted operating profit the year before.Cost savings targets have been dropped to GBP100 million from GBP230 million with plans to implement "a range of short-term cost actions" being enacted.JPMorgan cut its rating on the postal firm to Underweight from Neutral following the profit warning.Ferguson was 5.2% lower despite its annual results meeting expectations, as it reported challenging trading in the UK and issued a cautious outlook.Trading profit - adjusted operating profit - for the year rose by 15% to USD1.51 billion from USD1.31 billion, due to strong performances in the US and Canada & Central Europe regions, the former due to a strong residential, commercial and industrial market.Revenue was USD20.75 billion, up 7.6% from USD19.28 billion the prior year.Ferguson's trading performance was largely in line with market consensus expectations, which predicted trading profit for the year to reach USD1.50 billion, and revenue to reach USD20.66 billion.However, the UK market remained challenging, as revenue dropped by 5.3% to USD2.57 billion from USD2.55 billion, due to the closure of branches and the exit of low margin wholesale businesses."Ferguson would be better off selling its UK operations so management can focus on North America without any distractions. It has already sold its Nordics business and is in the process of selling its Central European operations, so a UK disposal would be the natural next step," commented AJ Bell investment director Russ Mould. In the FTSE 250, over-50s travel and insurance provider Saga gained 3.2% after UBS raised its recommendation on the stock to Buy from Neutral. Meanwhile, UBS started challenger bank CYBG at a Sell rating, causing shares in the company to shed 4.5% and peer Virgin Money - in the process of being taken over by CYBG in an all-stock deal - fell 4.2%.Elsewhere on the Main Market, ScS rose 7.2% after the sofa and carpet seller recorded an increase in annual profit and upped its dividend by 10%.For the year ended July 28, ScS pretax profit increased 10% to GBP13.2 million from GBP12.0 million the year before. The company's gross sales were broadly flat at GBP352.3 million from GBP349.5 million on a revenue increase of 1.3% to GBP337.3 million from GBP333.0 million. ScS is recommending a final dividend of 10.90 pence per share, resulting in a full year dividend of 16.20p, a 10% increase on last year's payout of 14.70p.