Industrial weakness helps push FTSE 100 down
THE FTSE 100 fell yesterday as weakness across some industrial and retail stocks pushed the index into the red.
The blue-chip index slipped 34 points to 8,248, a 0.4% fall. Burberry, Marks & Spencer and Melrose were in the top 10 fallers.
Melrose shares fell after plane-making giant Airbus, a key client, announced a profit warning, citing a shortage of plane parts for pushing expected deliveries down.
Airbus tumbled 9.4% and was among the biggest drags on the index, after Europe’s largest aerospace group cut its industrial and financial targets and took a hefty 900 million euro ($965 million) charge for its space activities.
Its profit warning and forecast for fewer plane deliveries dragged jet-engine manufacturers Rolls-royce and MTU Aero Engines lower.
Dan Coatsworth, investment analyst at AJ Bell, said: “It is tempting to think that life will be simpler if your biggest rival is a terrible mess and Boeing’s woes are a potential boon for Airbus.”
He added: “However, the European firm is encountering some turbulence of its own and that is having a knock-on effect upon the companies that form part of its supply chain.
“Shares in engineers Melrose, Rolls-royce and Bodycote slid lower, alongside those of European manufacturers MTU Aero Engines and Safran, as
Airbus tumbled to a sevenmonth low.”
France’s CAC 40 finished 0.6% down, while Germany’s Dax fell 0.9%.
Meanwhile, stateside, the S&P 500 was up 0.3% as markets were closing in London, while the Dow Jones was down 0.7%.
The pound was down 0.06% at 1.267 US dollars and was up 0.17% at 1.184 euros.
In company news, commercial property giant Land Securities (Landsec) said it has taken control of Kent’s popular Bluewater shopping centre, after striking a £120 million deal to increase its stake. The FTSE 100 firm told shareholders on Tuesday it has acquired a further 17.5% stake in Bluewater from Singapore’s GIC.
The move has increased its ownership of the retail destination near Dartford to 66.25%.
Shares rose in early trading, before falling back to finish the day 0.6% down.
The price of a barrel of Brent crude oil was down 0.34% to 81.35 US dollars as markets were closing in London.
The biggest risers on the FTSE 100 were Admiral Group, up 59p to 2628p, airline easyjet, up 8.4p to 463.6p, DS Smith, up 5.2p to 370.8p, Sage Group, up 14p to 1080.5p, and the National Grid, up 7.8p to 896.6p.
Meanwhile, the biggest fallers on the FTSE 100 were Convatec, down 11.8p to 229.6p, fashion retailer Burberry, down 47.4p to 970.6p, BT, down 6.1p to 138.95p, Weir Group, down 64p to 1984p, and IMI, down 51p to 1769p.