London close: FTSE ends in the red, Tesco weighs heavily

LONDON (ShareCast) – – FTSE ended 31 points lower
– US new home sales higher than expected
– Tesco (Xetra: TCO.DE – news) fails to impress investors

techMARK 2,899.47 -0.12%
FTSE 100 6,799.15 -0.46%
FTSE 250 16,471.66 -0.34%

UK markets finished today’s session in the red, hit by a combination of weaker sentiment, ex-dividends, and concerns over the future of supermarket giant Tesco.

The FTSE 100 finished 31.35 points lower at 6,799.15.

Sentiment has been dampened by the ongoing turbulent situation in Ukraine, and concern about the impact of new regulations announced today by Ofgem.

Today saw Ukraine unpeg the Hyrvnia, its currency, from the US dollar in reaction to the recent drop in the country’s international reserves. The European nation is asking the international community to provide a $ 5bn emergency loan amid negative news-flow surrounding tensions with the Russian Federation.

Investors are also gearing up for a particularly busy session tomorrow, which will see the release of US durable goods and initial jobless claims, Eurozone, consumer confidence figures, German unemployment data, as well as a testimonial from Federal Reserve Chair Janet Yellen on monetary policy and the economy.

Ofgem announces new rules affecting ‘Big Six’

Energy regulator Ofgem has unveiled new rules that will mean the “big six” energy suppliers will face tougher scrutiny to ensure a “simpler, clearer, fairer” market.

Under the new enforcements, which come into play at the end of March, the largest six suppliers in the UK will have to trade fairly with independent suppliers in the wholesale market, or face financial penalties.

January US new home sales surprise to the upside

Sales of new single-family homes in the US rose by 9.6% over the month to reach an annualised rate of 468,000 during the month of January, according to the US Department of Commerce. The consensus estimate was for growth of 405,000.

Barclays Research said the report was “consistent with the idea that foot traffic may have slowed somewhat and adverse weather across much of the eastern portion of the US may have reduced housing activity”, but noted underlying demand and buying intentions had remained healthy, and predicted “any drop-off in housing to be a pause and not a retrenchment”.

Timing of first hike in Bank rate difficult to predict, MPC (KOSDAQ: 050540.KQ – news) ‘s Miles says

Monetary Policy Committee member David Miles today said that interest rates will not rise in the next few months, and added that the Bank of England is “not in a hurry” to hike them.

Speaking to the BBC, Miles stated: “It may be that sometime next year might be the right time [to raise interest rates]. It is difficult to predict in advance.” He also said the rise would be very gradual when it did occur.

Weir jumps on positive 2014 outlook

Engineering solutions provider Weir soared to the top of the risers today after it posted an in-line set of full-year results, as a positive performance by the Minerals division helped to offset an otherwise “challenging” year for the group. Looking ahead, the company believes it will return to underlying growth in the current year.

ARM Holdings (LSE: ARM.L – news) was rising on the back of the four-day Mobile World Congress currently being held in Barcelona.

Leading the downside was easyJet, which fell after the stock went ex-dividend.

Tesco shares were firmly lower after Jefferies reduced its target price from 440p to 375p, Nomura cut its target price from 350p to 310p, and Oriel Securities downgraded the stock from ‘add’ to ‘hold’ after the troubled supermarket chain launched £200m of price cuts and said it was stepping up its store revamp programme. Sector peers Morrison Supermarkets and Sainsbury (Berlin: SUY1.BE – news) were also both firmly in the red.

ITV (LSE: ITV.L – news) was lower despite a strong set of full-year results, which saw it boost its dividend and announce an additional special pay-out to shareholders. The fall is being attributed to the broadcaster’s announcement it does not plan to make a bid for Channel 5, currently owned by Northern & Shell.

On the second tier index, International Personal Finances jumped after its profit came in slightly ahead of expectations. Profit before tax leapt 24%, prompting a 20% increase to the dividend.

Meanwhile, Beazley (Other OTC: BEAZF – news) led the downside after going ex-dividend.

FTSE 100 – Risers
Weir Group (Frankfurt: 42W.F – news) (WEIR) 2,519.00p +7.10%
Wolseley (Frankfurt: 24W2.F – news) (WOS) 3,452.00p +1.68%
ARM Holdings (ARM) 991.00p +1.59%
Imperial Tobacco Group (IMT) 2,446.00p +1.45%
RSA Insurance Group (RSA) 102.20p +1.19%
SABMiller (Berlin: BRW1.BE – news) (SAB) 2,901.50p +1.13%
Royal Mail (Other OTC: ROYMF – news) (RMG (Brussels: ROU.BR – news) ) 604.50p +1.00%
GlaxoSmithKline (Frankfurt: GS7.F – news) (GSK) 1,690.50p +0.96%
International Consolidated Airlines Group SA (CDI) (IAG) 454.60p +0.64%
GKN (Berlin: GKN.BE – news) (GKN (LSE: GKN.L – news) ) 412.30p +0.39%

FTSE 100 – Fallers
easyJet (EZJ) 1,680.00p -5.14%
Admiral Group (LSE: ADM.L – news) (ADM) 1,448.00p -2.88%
Tesco (Frankfurt: TS3.F – news) (TSCO) 326.00p -2.74%
Royal Bank of Scotland Group (RBS (LSE: RBS.L – news) ) 354.00p -2.32%
ITV (Frankfurt: IJ7.F – news) (ITV) 201.50p -2.23%
Kingfisher (Frankfurt: KFI1.F – news) (KGF) 389.10p -2.09%
CRH (CRH (Irish: CRG.IR – news) ) 1,751.00p -2.07%
Morrison (Wm) Supermarkets (MRW) 235.00p -1.92%
Persimmon (PSN) 1,435.00p -1.91%
Travis Perkins (LSE: TPK.L – news) (TPK) 1,926.00p -1.88%

FTSE 250 – Risers
International Personal Finance (LSE: IPF.L – news) (IPF) 557.50p +10.62%
CSR (Frankfurt: GQY.F – news) (CSR (LSE: CSR.L – news) ) 716.50p +5.60%
Greencore Group (LSE: GNC.L – news) (GNC) 259.40p +5.02%
Ladbrokes (Frankfurt: LADA.F – news) (LAD) 160.00p +3.49%
St James’s Place (STJ) 864.00p +3.47%
Pace (PIC) 415.00p +2.82%
Henderson Group (LSE: HGG.L – news) (HGG) 249.20p +2.64%
Fidessa Group (LSE: FDSA.L – news) (FDSA) 2,504.00p +2.62%
Afren (Berlin: A2J.BE – news) (AFR) 156.80p +2.48%
JD Sports Fashion (LSE: JD.L – news) (JD.) 1,588.00p +2.45%

FTSE 250 – Fallers
Beazley (BEZ) 258.30p -7.22%
Taylor Wimpey (LSE: TW.L – news) (TW.) 121.20p -5.24%
Evraz (LSE: EVR.L – news) (EVR) 72.85p -4.71%
Kentz Corporation Ltd (LSE: KENZ.L – news) . (KENZ) 743.50p -4.25%
Kazakhmys (Frankfurt: A0HFWR – news) (KAZ) 223.40p -4.12%
Capital & Counties Properties (LSE: CAPC.L – news) (CAPC) 377.00p -3.83%
Playtech (Frankfurt: PL8.F – news) (PTEC) 805.00p -3.77%
Cable & Wireless Communications (LSE: CWC.L – news) (CWC) 52.60p -3.66%
Essar Energy (LSE: ESSR.L – news) (ESSR) 69.35p -3.34%
Foxtons Group (FOXT) 372.40p -3.12%

NR

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