23rd Sep 2014 09:35
LONDON (Alliance News) - UK shares are trading significantly lower after a US government move against tax inversions brought down pharmaceutical stocks, while the latest UK grocery sector data from the Kantar Worldpanel has hit the shares of the big listed supermarkets.
At mid-morning, the FTSE 100 is trading 1.2% lower at 6,694.39, the FTSE 250 is 1.1% lower at 15,568.02, and the AIM All-Share index is down 0.4% at 756.67.
Pharmaceuticals are the leading fallers on the blue-chip index after the US government on Monday announced a crackdown on US companies that use mergers and takeovers to move their headquarters to countries with lower taxes. The announcement has hit London-listed drug makers which have recently been the takeover targets of large US corporations.
Shares in Shire are down 5.8%, while AstraZeneca trades down 5.1% and Smith & Nephew trades 3.1% lower.
The latest grocery market-share figures from Kantar Worldpanel for the 12 weeks ending September 14 showed that share and sales continue to be stolen by heavy discounters and upmarket grocers from the UK's biggest supermarket chains, although Wal-Mart-owned Asda continues to fare better than its three other rivals - Tesco, J Sainsbury and Wm Morrisons Supermarkets.
Tesco's market share in the 12 period slid to 28.8% from 30.2% a year earlier, while its sales fell by 4.5% in the period from a year before. Morrison saw its market share fall to 10.9%, compared with 11.1% in the same period last year, with sales declining 1.3% year-on-year, and Sainsbury's, which had been outperforming the other two in recent years, also posted a fall in market share and sales - with sales declining 1.8% year-on-year and its market share shrinking to 16.2% from 16.6%.
In contrast, Asda, owned by US retail giant Wal-Mart Stores, saw sales inch up 0.8% in the period, and increased its market share to 17.4%, up from 17.3% last year.
Tesco is the biggest faller out of the supermarkets with its shares down 4%, while Sainsbury trades down 3.2% and Morrison trades 1.8% lower.
In the FTSE 250, sweeteners and starches company Tate & Lyle said it faced a challenging first half, and warned that supply-chain issues will hit its annual profit. In a trading statement, the company said supply constraints, due to a severe winter in the US, caused operational difficulties in its US corn plants, which left it with much-lower inventories than usual, wiping around GBP10 million off its profit for the first quarter. The company's supply chain was also hit by an industrial accident at it Singapore facility, which drove up costs.
Tate & Lyle is, by some distance, the biggest faller in the mid-cap index, dropping 16%.
Germany's Markit manufacturing purchasing managers index for September fell by more than expected to 50.3 from 51.4 in August. The reading was forecast to be 51.2. However, the country's services PMI rose to 55.4 from 54.9 in August and beat the consensus of 54.6.
Eurozone manufacturing PMI showed the slowest rate of growth in fourteen months, reading 50.5. This was lower than the August reading of 50.7 but matched the consensus figure. In addition, the region's composite output index fell to a nine month low at 52.3 in September from 52.5 in September. The reading was expected to remain unchanged at 52.5.
European markets, like London, are down, with the CAC 40 trading 1.5% lower and the DAX down 1%.
Still ahead on Tuesday is US housing price index for July at 1400 BST and Markit manufacturing PMI for September at 1445 BST.
Futures indicate Wall Street for a lower opening with the DJIA expected to open 0.2% lower, the S&P 500 0.3% lower and the Nasdaq Composite down 0.4%.
By Neil Thakrar; [email protected]
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Related Shares:
AstrazenecaTescoSmith & NephewTate & LyleMRW.LShireSainsbury's