LONDON, July 28 ― London's FTSE 100 fell yesterday, weighed by insurance and consumer staple stocks, with Lysol maker Reckitt Benckiser adding to the pressure as it missed quarterly sales estimates.
The FTSE 100 ended down 0.4 per cent, with life insurers and consumer staple stocks down 1.8 per cent and 1.4 per cent respectively.
Reckitt dropped 8.4 per cent, marking its worst day since February 2003, after missing sales growth estimates and warning on margins as costs rise and easing lockdowns slow demand for products such as Lysol disinfectants.
Other consumer staple stocks, including Imperial Brands , British American Tobacco and Associated British Foods, fell by between 0.1 per cent and 1.1 per cent.
“Investors are likely to be questioning the true defensive characteristics of these consumer goods companies,” said Danni Hewson, financial analyst at AJ Bell.
“With consumers increasingly flocking to cheaper supermarket own-label products, the idea that the big brand owners are guaranteed sales success is no longer a given. Margin weakness only adds to the bear case for Reckitt.”
The FTSE 100 has recovered nearly 26 per cent since its October lows, when the country battled a deadly second wave of Covid-19 infections, amid support from dovish central bank policies.
However, the blue-chip index is still 12 per cent away from its record high and has significantly underperformed its European and US peers.
Meanwhile, Prime Minister Boris Johnson warned Britons should not get carried away by six days of better Covid-19 infection data, while one of the country's top epidemiologists said the bulk of the pandemic could be behind Britain in just a few months.
The mid-cap FTSE 250 index fell 0.2 per cent.
Among other stocks, British online greeting card publisher Moonpig tumbled 9.3 per cent after it warned demand would slow in its new financial year as shops reopened.
Daily Mirror publisher Reach Plc gained 6.7 per cent after it said it was trading ahead of expectations and that it expects the strong momentum to continue.
British transport company FirstGroup fell 0.2 per cent after its Chief Executive Matthew Gregory said he planned to step down in September, a day after the company's biggest shareholder demanded his resignation. ― Reuters
