- Petrofac delivers profit warning, IAG and Friends Life fall
- Stocks pull back from recent highs
- Chinese inflation slows to 18-month low
techMARK 2,789.07 -0.65%
FTSE 100 6,817.83 -0.31%
FTSE 250 15,908.47 -0.38%
UK stocks retreated from a near 11-week high on Friday with a raft of disappointing corporate earnings and deflationary pressures in China dampening risk appetite among investors.
Petrofac was leading the way lower with shares tanking after a profit warning, while IAG and Friends Life fell following their first-quarter results.
The FTSE 100 was down 0.3% at 6,818 by midday after having risen to 6,839.25 on Thursday, its highest closing mark since February 24th.
Over in Europe, stocks were falling after the STOXX Europe 600 Index closed at its highest level since January 2008.
Global stock markets performed well yesterday on the back of dovish comments from European Central Bank President Mario Draghi, who signalled that policymakers are ready to act next month to stimulate the Eurozone economy.
Meanwhile, upbeat jobless claims figures in the US gave sentiment a lift, along with words from Federal Reserve Chair Janet Yellen who reiterated that interest rates will remain low for a long time yet.
Chris Beauchamp, Market Analyst at IG, blamed a weak finish in the US last night as the reason for the pull-back today. He said: "The inability of the Dow Jones to hold above 16,600 is a worrying short-term sign for the bulls and may well signal another swift retest of 16,400."
US stock futures were pointing to a weak open on Wall Street later on with the Dow expected to fall around 0.2%.
Markets were also focusing on worrying data from China where inflation unexpectedly slowed to an 18-month low in April, sparking concerns over weakening domestic demand. Consumer prices rose at an annual rate of just 1.8%, well below the 2.4% gain in march and below the 2.1% consensus estimate.
Petrofac plummets after profit warning
Shares in oilfield services firm Petrofac sank as much as 17% after the company warned on profits, saying its bottom line in 2014 is likely to weaken due to lower-than-expected earnings from its IES division. The company, which had previous guided to "flat to modest growth" in net profit this year, now expects a decline of as much as 10.7%.
British Airways- and Iberia-owner IAG, which was flying higher early on, dropped into the red after saying it had narrowed operating losses in the first quarter, helped by higher revenue and reduced fuel costs.
Insurer Friends Life was lower after warning that measures in the UK government's Budget will hit its ability to achieve new business targets this year. Friends Life, formerly known as Resolution, said Chancellor George Osborne's decision to relax rules forcing people to buy annuities to fund their retirement would have longer-term implications for its business and the industry.
Media group WPP edged higher after sector peers Omnicom and Publicis abandoned their $35bn merger to create the world's largest advertising company.
British Land fell despite saying it has completed its first letting at Marble Arch House in the West End as the real estate stock was downgraded to 'hold' from 'buy' at Liberum.
Similarly, Rolls-Royce's announcement of £60m of orders for its offshore ship designs and equipment underwhelmed the market after Barclays cut its rating to 'underweight' from 'overweight'.
Department stores Marks & Spencer and Debenhams were trading higher early on after high street peer John Lewis reported 14.5% annual sales growth in the week to May 3rd.
Interdealer broker Tullett Prebon disappointed by saying that it will take a £20m one-off hit this year as it scales back costs and cuts jobs amid a challenging market. Revenues were down 12% in the first four months of the year.
FTSE 100 - Risers
Marks & Spencer Group (MKS) 459.70p +2.29%
Intertek Group (ITRK) 3,041.00p +1.84%
Anglo American (AAL) 1,604.50p +0.98%
Rio Tinto (RIO) 3,231.00p +0.81%
Pearson (PSON) 1,125.00p +0.63%
Unilever (ULVR) 2,627.00p +0.57%
Compass Group (CPG) 967.50p +0.57%
Sainsbury (J) (SBRY) 333.10p +0.57%
Diageo (DGE) 1,840.50p +0.55%
Next (NXT) 6,515.00p +0.54%
FTSE 100 - Fallers
Petrofac Ltd. (PFC) 1,173.00p -15.49%
International Consolidated Airlines Group SA (CDI) (IAG) 390.60p -3.46%
ARM Holdings (ARM) 880.00p -2.38%
Sage Group (SGE) 391.30p -2.05%
Friends Life Group Limited (FLG) 297.80p -1.68%
Prudential (PRU) 1,371.00p -1.61%
Persimmon (PSN) 1,350.00p -1.53%
Barratt Developments (BDEV) 376.90p -1.46%
SSE (SSE) 1,510.00p -1.44%
Royal Bank of Scotland Group (RBS) 326.40p -1.39%
FTSE 250 - Risers
IP Group (IPO) 182.20p +3.11%
Genus (GNS) 1,082.00p +3.05%
Debenhams (DEB) 81.90p +2.38%
Grafton Group Units (GFTU) 625.50p +2.21%
CSR (CSR) 558.50p +1.45%
Riverstone Energy Limited (RSE) 912.00p +1.33%
Rightmove (RMV) 2,425.00p +1.17%
Keller Group (KLR) 986.00p +1.13%
esure Group (ESUR) 253.30p +1.12%
Restaurant Group (RTN) 644.50p +1.02%
FTSE 250 - Fallers
Tullett Prebon (TLPR) 298.70p -5.38%
Wood Group (John) (WG.) 775.00p -3.85%
Infinis Energy (INFI) 210.20p -2.64%
Drax Group (DRX) 660.00p -2.51%
ICAP (IAP) 391.20p -2.32%
Cairn Energy (CNE) 182.70p -2.30%
Bellway (BWY) 1,449.00p -2.29%
Imagination Technologies Group (IMG) 192.70p -2.18%
Henderson Group (HGG) 241.70p -1.91%
Galliford Try (GFRD) 1,173.00p -1.84%