FTSE hit by drops in Vodafone and retailers

By Sudip Kar-Gupta

LONDON (Reuters) – Sell-offs in mobile operator Vodafone and retailer Marks & Spencer dragged Britain’s blue-chip equity index lower on Tuesday, after disappointing forecasts.

The benchmark FTSE 100 index was down by 0.7 percent, or 47.09 points, at 6,797.46 points.

Vodafone took the most points off the FTSE, falling 4.9 percent to 206.60 pence after it said core earnings would decline in 2015 due to investment spending needed for its business.

Analysts at Societe Generale said the company’s results were lacklustre, but Strand Capital managing director Kyri Kangellaris said Vodafone was a stock worth buying on the dip.

“There’s no doubt that it’s still a good company in the long run. I’d look to pick some up if it fell down to the 200 or 195 pence level,” he said.

Clothing and food retailer Marks & Spencer also fell 1.3 percent after it warned that a new website would take four to six months to “settle in”, affecting the performance of its general merchandise business in the three months to end-June.

The fall in M&S impacted the shares of rival High Street retailers, with Tesco falling 2.2 percent while WM Morrison declined by 2.4 percent.

The FTSE 100, which is up by roughly 1 percent since the start of 2014, hit its highest level in more than 14 years last week but has since slipped back.

“We’re stalling up at these levels. I see a bit of a consolidation and then maybe the FTSE starting to drift lower over the next couple of weeks,” said Hantec Markets analyst Richard Perry.

(Additional reporting by Francesco Canepa; Editing by Jeremy Gaunt)