FTSE 100 slightly down as TUI profit warning raises doubts over the leisure sector
Headline shares were modestly lower in midday trade, as falling house prices and slowing retail growth added pressure to already fragile investor sentiment, with holiday operator Tui Travel Plc (LON:TT.) tumbling on a profit warning. At high noon, the FTSE100 was down 16.39 points at 5,394.13 with the FTSE250 off 88.4 points at 10,123.8 and the FTSE Smallcaps 7.91 points lower at 2,826.83. US stock futures moved sharply lower ahead of the Fed's announcement on interest rates and monetary policy later in the day. Dow Jones Industrial Average futures lost 68 points at 10,598, S&P500 futures fell 8 points at 1,117 and Nasdaq 100 futures shed 11.5 points at 1,900.2.
LONDON MARKETS
Falling house prices and slowing retail sales in July gave investors in London food for thought this morning, casting more doubts over the UK economic recovery. Top add to the downbeat attitude, US futures dipped, reflecting nervousness ahead of the next pronouncement on US interest rates later today. Losses were restricted by news that the UK Trade Deficit narrowed to £3.3bn in June.
A series of ill-received earnings reports in London also helped dampen spirits, with an announcement by International Power (LON:IPR) that is merging with France's GDF-Suez finding few plaudits. GDF will own 70% of the new company, the deal having been sweetened with a 92p per share special dividend. The group made a profit from operations of £524m in the half-year to end-June, down 5% (down 9% at constant currency). International Power shares slipped 16p at 364p.
The travel and leisure industry suffered as Thomson Holidays operator Tui Travel Plc (LON:TT.) warned that annual results would be at the lower end of forecasts after a falling off in UK bookings, exacerbating the problems encountered with volcanic ash and airspace restrictions. TUI shares tumbled to the foot of the FTSE league table, down 20.5p at 205.1p, while midcap peer Thomas Cook Group Plc (LON:TCG) slumped 10.4p at 188.1p and cruise operator Carnival (LON:CCL) sank 42p at 2,275p on the read across.
Intercontinental Hotels Group (LON:IHG) failed to impress with better-than-forecast half-year operating profits, the shares sliding 50p at 1,074p. Budget hotel rival Whitbread (LON:WTB) lost 13p at 1,458p in sympathy.
Mining shares felt the heat as recovery hopes waned, with Xstrata Plc (LON:XTA) the runt of the litter, down 29.5p at 1,055.5p. Antofagasta (LON:ANTO) lost 27p at 1,020p and Rio Tinto (LON:RIO) weakened 77.5p at 3,378p.
Royal Bank Of Scotland Group Plc (LON:RBS) led the banks lower, hit by a downgrade to neutral from outperform at Credit Suisse. RBS fell 1.43p at 48.92p. Lloyds eased 0.67p at 74.31p, while Barclays (LON:BARC) bucked the trend, gaining a modest 0.9p at 335.9p.
On the upside with blue chips, Cairn Energy Plc (LON:CNE) topped the leaderboard, up 8.4p at 469.4p on expectations of great things from its Greenland venture, while Tullow Oil Plc (LON:TLW) gained 8p at 1,288p as crude remained close to the $81 a barrel level.
Pharmaceutical firms were sought after, with Astrazeneca (LON:AZN) still benefiting from yesterday's Seroquel settlement news, ahead 41p at 3,346p. Glaxosmithkline (LON:GSK) rose 18.5p at 1,170.5p and Shire (LON:SHP) gained 23p at 1,494p.
Other notable gainers included lab testing firm Intertek Group (LON:ITRK), ahead 9p at 1,722p, and specialist engineering group Smiths Group (LON:SMIN), up 19p at 1,143p.
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TUI Travel PLC is a holding Company. The Company is a leisure travel company with over 250 brands in 180 countries. It operates in four sectors: Mainstream, Specialist & Activity, Accommodation & Destinations, and Emerging Markets. The Mainstream Sector consists of three Regions: Northern, Central Europe and Western Europe. The Specialist & Activity Sector comprises over 100 travel businesses and it operates under seven divisions: Adventure, Education, Language, Marine, North American Specialist, Sport and Specialist Holiday Group. Accommodation & Destinations Sector is a global provider of accommodation and inbound travel services. The Emerging Markets Sector works closely with the senior management across the Group to develop and implement its participation strategies in the emerging markets. Effective February 22, 2013, TUI Travel PLC acquired isango! Ltd. more »
Barclays PLC (Barclays) is a global financial services provider engaged in retail banking, credit cards, wholesale banking, investment banking, wealth management and investment management services. The Company’s operations include its overseas offices, subsidiaries and associates. The Company operates in eight segments: UK Retail and Business Banking (UK RBB), Europe Retail and Business Banking (Europe RBB), Africa Retail and Business Banking (Africa RBB), Barclaycard, Barclays Investment Bank, Barclays Corporate Banking, Wealth and Investment Management, and Head Office and Other Operations. In April 2012, its investment banking division is combining its corporate finance and mergers and acquisition groups. In July 2012, it sold 90.4% of Sweden-based carbon project developer Tricorona back to the Company's management. In February 2013, Kotak Mahindra Bank Ltd acquired the business loans portfolio of the Indian arm of Barclays Plc. more »
The Royal Bank of Scotland Group plc (RBS) is a holding company of a global banking and financial services group. The Company operates in the United Kingdom, the United States and internationally through its two principal subsidiaries: The Royal Bank of Scotland plc (the Royal Bank) and National Westminster Bank Plc (NatWest). Both the Royal Bank and NatWest are clearing banks. In the United States, the Company’s subsidiary Citizens Financial Group, Inc. (Citizens) is a commercial banking organization. The Company’s business segment include UK Retail, UK Corporate, Wealth, Global Transaction Services, Ulster Bank, US Retail & Commercial, Global Banking & Markets (GBM), RBS Insurance, Central items, Non-Core Division and Business Services. In May 2012, The Paragon Group of Companies PLC announced the acquisition of further unsecured consumer loans, through its Idem Capital Securities subsidiary, from the Company. more »
