FTSE edges upwards

More than £500m (€762m) was wiped from the value of Tate & Lyle after the sugar and sweetener group delivered a surprise profits warning today.

More than £500m (€762m) was wiped from the value of Tate & Lyle after the sugar and sweetener group delivered a surprise profits warning today.

Shares soured 16% but the overall market stood firm as the FTSE 100 Index closed 9.2 points higher at 6227.6.

There was also a sign of resilience from supermarkets after the Competition Commission published its thoughts at the start of its investigation into the £95 billion grocery sector.

While it is still early days in the inquiry, analysts picked up on signs that the sector could be more competitive than previously thought. And they noted a line from the CC that it would not look to punish Tesco for its commercial success.

Tesco was up 1.5p at 415.25p, while Sainsbury’s added 3.5p to 438p and Morrisons rose 0.25p to 284p.

Food producers were under pressure after Tate & Lyle said sales of its Splenda sugar substitute had been weaker than expected among US soft drinks firms, causing profits to come under pressure. While Tate dived 112p to 608p, Unilever fell 15p at 1384p, British Sugar owner Associated British Foods eased 7p at 812p and Cadbury Schweppes fell 4p to 554p.

Miners kept the top flight on the front foot after gains of 85p to 2660p for Rio Tinto and a rise of 32p to 1125p for Vedanta Resources.

Marks & Spencer was also up 11.5p to 681.5p, following the announcement of plans to tackle its final salary scheme pension deficit. It will find the extra £704 million by contributing £500m ((€762m) into the scheme through the release of its properties to a newly-established partnership with the pension scheme.

WH Smith led the second tier risers’ as its shares jumped almost 6%, or 21p to 395p, after it said it was on course to meet profits expectations. Like-for-like sales were 6% lower on the high street, but the retailer made up the difference with an increased focus on margins.

LogicaCMG moved in the opposite direction, down 5%, or 9.25p to 173.5p, after it said the growth rate in its IT services branch was seen at below 5%, under than the guidance from analysts.

Back in the top flight, British Airways shares continued to fall, down 5.5p to 530.5p, amid the threat of strike action from cabin crew members as part of a dispute over pay, staffing and sickness absence.

And shares in More Than insurer Royal & Sun Alliance lifted 1.75p to 163.5p after a US Court dismissed a General Motors complaint against the group. The US car maker was suing the group for about £500m (€762m), alleging it had not been reimbursed for asbestos-related personal injury claims.

The biggest Footsie risers were Rio Tinto up 85p at 2660p, Vedanta Resources ahead 32p at 1125p, Smith & Nephew up 13.5p at 566.75p, and BHP Billiton ahead 22p at 939p.

The biggest fallers were Tate & Lyle down 112p at 608p, SABmiller off 28p at 1178p, Drax Group down 14p at 725p and Slough Estates off 12p at 760p.

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