London close: Vodafone drags FTSE into negative finish, CPI in focus

LONDON (ShareCast) – – FTSE closes down 42.55 points at 6,802
– Vodafone and M&S miss expectations
– CPI (Other OTC: CPICQ – news) rises 0.2 percentage points in April to 1.8 per cent

techMARK 2,706.50 -0.48%
FTSE 100 6,802.00 -0.62%
FTSE 250 15,440.25 +0.40%

Significant falls by a number of blue chip heavyweights ensured a negative finish for UK stocks on Tuesday, with Vodafone providing the biggest drag.

The FTSE 100 closed down 42.55 points at 6,802.

Brenda Kelly, Chief Market Strategist at IG (LSE: IGG.L – news) , said: “The FTSE’s retreat from the highs of last week continued today, as we saw the index hit its lowest level for over a week. 6,800 might be important on a psychological level, but it is still only a 1.4% decline from the peak, and the picture is distorted to some extent by two consecutive days of big moves in stocks with significant weighting in the index.

“The market appears however to have stalled yet again, with little apparent desire to revisit 6,900 any time soon. Neither macro data nor earnings have shown the ability to energise this market, and this leaves us wondering what can.”

The main news of the day was of course UK consumer price inflation (CPI), which climbed 0.2 percentage points in April to 1.8% year-on-year.

Barclays Research said the figure was in line with its above-consensus expectations and attributed the rise in the main to core inflation, particularly services, and to a lesser extent, energy.

It said: “Today’s outturn, albeit slightly stronger than last month’s, is in line with our view that inflation pressures remain muted in the economy. We expect inflation to be close to, but below, the 2% Bank of England (BoE (Shenzhen: 000725.SZ – news) ) target in 2014 and 2015. Imported inflation pressures remain subdued amid the benign global inflation environment, while earnings growth is increasing at a measured pace.

“We believe that the current inflation outlook provides further comfort to the MPC (KOSDAQ: 050540.KQ – news) that inflation pressures are not yet building up in the economy, despite the recovery gathering speed. We therefore maintain our view that the MPC will hike rates in the second quarter of 2015.”

Cameron eyes tightening of Help to Buy after Carney warnings

Prime Minister David Cameron today said the Help to Buy scheme may have to be scaled back in order to prevent the UK property market from boiling over.

Following words of warning from BoE Governor Mark Carney at the weekend that rising house prices were the biggest risk to Britain’s economic recovery, Cameron said he was wholly in agreement.

Carney said Help to Buy was a relatively small and “pretty targeted” scheme, but cautioned it “could grow a lot and it could change attitudes in other parts of the mortgage market”.

UK credit card borrowing rises at fastest rate for five years, says BBA

Credit card borrowing in the UK increased at its highest rate for five years, potentially fuelling fears that the economic recovery may be too reliant on consumer debt.

Shoppers made 197m card purchases in March totalling £11.8bn, 13% and 8% higher respectively than during the same month a year ago, according to monthly data from the British Bankers Association (BBA).

Vodafone slides after results, Carnival (LSE: CCL.L – news) docks in top spot

Vodafone was a notable faller today after it said earnings came in just shy of consensus forecasts in the year to end-March, though the mobile operator confirmed its expected final dividend of 7.47p per share.

Group revenue sank 1.9% in line with the consensus to £43.6bn, with organic service revenue declining 4.3%, leading to earnings before interest, tax, depreciation and amortisation (EBITDA) sliding 7.4% to £12.8bn, with consensus expecting £12.9bn.

Tesco (Xetra: TCO.DE – news) declined after Jefferies cut its target price from 320p to 310p, downgrading the supermarket chain to ‘hold’.

Meanwhile, Carnival steamed ahead on the back of a rating upgrade from Morgan Stanley (Berlin: DWD.BE – news) , although it did say that “ultimately, we remain cautious”.

ITV (LSE: ITV.L – news) climbed after it was upgraded to ‘hold’ versus ‘sell’ by broker Berenberg.

FTSE 100 – Risers
Carnival (Berlin: CVC1.BE – news) (CCL) 2,380.00p +3.39%
Barratt Developments (LSE: BDEV.L – news) (BDEV) 350.90p +2.30%
BT Group (LSE: BT-A.L – news) (BT.A) 379.30p +2.21%
ITV (Frankfurt: IJ7.F – news) (ITV) 176.60p +2.20%
Coca-Cola HBC AG (CDI) (CCH) 1,375.00p +2.15%
International Consolidated Airlines Group SA (CDI) (IAG) 378.40p +2.05%
Travis Perkins (LSE: TPK.L – news) (TPK) 1,649.00p +2.04%
Babcock International Group (BAB (Other OTC: BABB – news) ) 1,197.00p +1.61%
Ashtead Group (LSE: AHT.L – news) (AHT) 830.00p +1.59%
WPP (Frankfurt: 0WP.F – news) (WPP (Other OTC: WPPGF – news) ) 1,239.00p +1.39%

FTSE 100 – Fallers
Vodafone Group (VOD) 205.30p -5.46%
ARM Holdings (LSE: ARM.L – news) (ARM) 845.00p -2.65%
Morrison (Wm) Supermarkets (MRW) 209.50p -2.10%
Anglo American (LSE: AAL.L – news) (AAL) 1,533.00p -2.08%
Antofagasta (LSE: ANTO.L – news) (ANTO) 783.50p -2.06%
G4S (Copenhagen: G4S.CO – news) (GFS) 252.60p -2.02%
BG Group (LSE: BG.L – news) (BG.) 1,270.50p -2.01%
Intertek Group (Other OTC: IKTSF – news) (ITRK) 2,926.00p -1.94%
Tesco (Frankfurt: TS3.F – news) (TSCO) 306.05p -1.91%
Rolls-Royce Holdings (RR.) 1,004.00p -1.67%

FTSE 250 – Risers
Paragon Group Of Companies (PAG) 383.60p +9.57%
Homeserve (HSV) 340.30p +7.32%
Foxtons Group (FOXT) 304.90p +6.27%
Pace (PIC) 360.00p +6.07%
Rightmove (Frankfurt: 3JD.F – news) (RMV) 2,267.00p +5.44%
Supergroup (Frankfurt: 49S.F – news) (SGP) 1,012.00p +4.98%
Greencore Group (LSE: GNC.L – news) (GNC) 259.00p +4.82%
Vedanta Resources (Other OTC: VDNRF – news) (VED) 1,058.00p +4.24%
NMC Health (LSE: NMC.L – news) (NMC) 459.00p +4.08%
Ocado Group (Other OTC: OCDGF – news) (OCDO) 312.20p +4.07%

FTSE 250 – Fallers
Afren (Berlin: A2J.BE – news) (AFR) 145.30p -5.71%
Cobham (COB) 298.00p -4.55%
Intermediate Capital Group (ICP) 413.30p -3.77%
888 Holdings (888) 124.50p -3.34%
Imagination Technologies Group (IMG) 203.30p -3.19%
Ferrexpo (Frankfurt: FEX.F – news) (FXPO) 135.00p -2.74%
Soco International (LSE: SIA.L – news) (SIA (SES: C6L.SI – news) ) 412.10p -2.53%
Laird (LRD) 275.70p -2.44%
Booker Group (LSE: BOK.L – news) (BOK) 137.30p -2.42%
Lonmin (Frankfurt: LRH.F – news) (LMI) 236.00p -2.36%

NR

Ftse Futures

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