London midday: Stocks in the red as Reckitt slides; Croda bucks trend

London stocks were off lows but still in the red by midday on Tuesday as investors waded through a raft of earnings, with consumer goods giant Reckitt pacing the decline after disappointing results.

The FTSE 100 was down 0.5% at 6,992.94, having taken its opening cue from another heavy selloff in China amid a crackdown on education firms and the technology sector.

Lukman Otunuga, senior research analyst at FXTM, said investors were wary ahead of important tech earnings in the US.

"It’s a big day for big tech as heavyweights such as Apple, Microsoft and Alphabet will report their latest quarterly earnings. If these titans report much better-than-expected quarterly results and revenues, this could further empower US equity bulls," he said. "In the meantime, a sense of caution is likely to linger across markets as investors adopt a guarded approach due to the Asian volatility and Federal Reserve policy meeting on Wednesday."

On home shores, the latest survey from the Confederation of British Industry showed retail sales rose strongly in July but stocks fell to a record low and are set to dip further amid supply problems.

Sales rose at a rate well above the long-run average in the year to July and orders grew at their fastest pace since December 2010 as the economy picked up, the business lobby group said. Sales are expected to grow again in August with order growth slowing slightly.

Across the distribution sector, stock levels compared with expected sales reached a survey low for the second month running. Retail, wholesale and motor sectors all reported stocks as too low. Store shelves have been left thinly stocked with Brexit and the pandemic combining to create a shortage of lorry drivers and some goods.

Ben Jones, the CBI's principal economist, said: "While demand may be more stable, operational issues worsen. Relative stock levels are at a record low and expected to fall further still, while the number one worry for many firms at the minute is labour shortages throughout the supply chain as staff self-isolate."

In equity markets, consumer goods giant Reckitt slid after saying it swung to a loss in the first half as it wrote down the value of its Infant Formula and China Nutrition assets.

Online greeting card company Moonpig also fell after saying it had doubled revenue and profits in its maiden results as a listed company, but warning of a drop in sales in the coming months as Covid restrictions were eased.

Ascential lost ground after it raised £153m in a placing to provide the group with greater balance sheet flexibility. The shares were placed 432p, which is a 4.9% discount to the closing share price on Thursday.

Games Workshop retreated even as the miniature wargames manufacturer posted a jump in full-year profit and revenue and lifted its dividend as it continued to benefit from increased interest in its miniature figures since Covid restrictions were put in place.

On the upside, speciality chemicals company Croda jumped to the top of the FTSE 100 as it said annual profit was set be well ahead of expectations and reported record results for the first half.

Just Eat gained after Cat Rock Capital - one of its largest shareholders - said the company should explore combinations with other global players and consider selling non-core assets if it wants to defend itself against a potential hostile takeover.

Irish convenience food group Greencore rallied as it lifted annual profits guidance after a strong third quarter, as Covid lockdown measures were relaxed.

Market Movers

FTSE 100 (UKX) 6,992.94 -0.46%
FTSE 250 (MCX) 22,887.03 -0.20%
techMARK (TASX) 4,450.97 -0.10%

FTSE 100 - Risers

Croda International (CRDA) 8,316.00p 6.26%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,118.00p 2.12%
Rightmove (RMV) 676.60p 1.26%
Smith (DS) (SMDS) 425.30p 1.00%
Ashtead Group (AHT) 5,698.00p 0.78%
SEGRO (SGRO) 1,199.50p 0.76%
Smurfit Kappa Group (CDI) (SKG) 4,037.00p 0.70%
Experian (EXPN) 3,120.00p 0.65%
Admiral Group (ADM) 3,347.00p 0.63%
Spirax-Sarco Engineering (SPX) 14,700.00p 0.55%

FTSE 100 - Fallers

Reckitt Benckiser Group (RKT) 5,689.00p -8.61%
Intermediate Capital Group (ICP) 2,189.00p -3.27%
Informa (INF) 487.80p -2.44%
Antofagasta (ANTO) 1,462.50p -2.21%
Prudential (PRU) 1,339.00p -2.01%
Glencore (GLEN) 320.30p -1.81%
Barratt Developments (BDEV) 698.40p -1.80%
Scottish Mortgage Inv Trust (SMT) 1,312.00p -1.76%
Rio Tinto (RIO) 6,004.00p -1.73%
Legal & General Group (LGEN) 261.30p -1.66%

FTSE 250 - Risers

Greencore Group (CDI) (GNC) 133.70p 3.72%
Trainline (TRN) 332.00p 2.91%
HGCapital Trust (HGT) 403.00p 2.54%
FirstGroup (FGP) 86.45p 2.43%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,118.00p 2.12%
Drax Group (DRX) 433.40p 1.98%
IntegraFin Holding (IHP) 547.00p 1.67%
easyJet (EZJ) 859.80p 1.66%
Premier Foods (PFD) 112.00p 1.63%
Just Group (JUST) 98.05p 1.50%

FTSE 250 - Fallers

Moonpig Group (MOON) 387.20p -8.81%
Ascential (ASCL) 422.80p -6.95%
Fidelity China Special Situations (FCSS) 342.00p -4.34%
Tullow Oil (TLW) 47.20p -2.80%
Templeton Emerging Markets Inv Trust (TEM) 186.64p -2.79%
Volution Group (FAN) 472.50p -2.78%
Hays (HAS) 149.10p -2.68%
JPMorgan Emerging Markets Inv Trust (JMG) 127.00p -2.46%
Schroder Asia Pacific Fund (SDP) 579.00p -2.36%
Moneysupermarket.com Group (MONY) 256.20p -2.21%