FTSE index falls back from record levels

Meanwhile, Dixons’ tie-up with Carphone Warehouse resulted in both groups’ shares falling by 5.23 to 45.67 and 26.50 to 301.3p. The £3.4bn merger of equals has underwhelmed some investors who were betting on greater synergies from the combination.

Staying on the mid-caps, Vedanta Resources also disappointed after reporting an 8.5pc drop in full-year core earnings to $ 4.5bn (£2.6bn) as the group was hit by lower copper and zinc production, weak metal prices and a ban on mining iron ore in two Indian states.

Vedanta’s revenues also fell by 11.6pc to $ 12.9bn (£7.6bn) but billionaire chairman Anil Agarwal chose to kick-off the results by lauding the company’s 200pc total shareholder return since the company’s initial public offering in 2003. This spin failed to wash with traders and the shares dropped by 19, or 1.93pc, to 966p.

“When the first line of a results statement celebrates 10 years since the company’s London IPO you know it’s going to be ugly financially, and full-year preliminary results are just that; double digit declines in revenues, operating margin contraction, a 75pc fall in underlying profits and significant unadjusted net losses profits”, Mike van Dulken, head of research at Accendo markets said.

Vedanta’s ownership structure is a mess as it waits to close a deal with Cairn Energy’s Indian business which is being frustrated by India’s tax authorities. Despite Mr Agarwal upping his stake to 69.59pc last month, according to regulatory filings, he has no plans to delist the business according to reports. The news may come as a relief to some investors who will no doubt be wary after the controversial take-private by Essar Energy’s majority owner.

Back on to the blue-chips, Walkie Talkie owner Land Securities shed 27 to £10.78 despite pre-tax profits rocketing 108pc to £1.1bn and reporting it had secured tenants for 87pc of the City building. However, the group issued a note of caution that the cycle may have already hit its peak and said it would not start further developments without ensuring they were pre-let.

The London Stock Exchange gained 10, or 0.56pc, to £18.11 after reporting a 50pc boost in annual revenues. The LSE, which owns the FTSE indices, said that performance had been boosted by the wave of company listings, which has seen companies raising more than £34bn in equity across its platforms in the first year. The group, which is targeting US indices Russell Investments, also said that it would be able to cut more than expected costs from its acquisition of LCH.Clearnet.

“Following the LCH.Clearnet deal we would expect any further significant deals to require an equity issue. This does increase the risk profile of the group but given the acquisition track record to date Numis believe the LSE deserves the benefit of the doubt,” analysts at Numis said. Additional financing would be weighed against the benefits of a deal which could include cross-selling to different customers and cost-synergies.

French Connection fell by 13.75 to 74p , its biggest drop since last January, after warning that US sales are below forecast. The company, which has posted losses for the last two years, said like-for-like sales growth had slowed from 11pc in the first three months of the year to 5.6pc in the 15 weeks to May 10.

Insurer Aviva shed 18 to 513.5p after reporting a mixed performance in its business in the first quarter. The company’s UK life insurance business suffered a 22pc decline as a result of the Budget’s shake-up of the annuities business. The company’s general insurance arm was also negative, however new business in Asia soared by 96pc.

Shares in Madame Tussauds owner Merlin Entertainments remained flat at 355p after it reported a rosy start to the year. The company recorded 12pc like-for-like growth on the back of warmer weather and The Lego Movie having a great influence on its Lego themed adventure parks.

Financial services group Old Mutual reported that gross sales had risen by 24pc to £6.2bn driven by its emerging markets and wealth units. But this was offset by $ 3.6bn of outflows from its US asset management business which it is preparing to float this year. The outflow news knocked the shares 10.30, or 4.92pc lower to 199.1p Analysts questioned whether the rate of outflows could hit the group’s ambition to launch an IPO of the US business. A float has been on the table since clients withdrew money in the wake of the 2008 financial crisis.

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