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Carnival shares drop further on uneasy FTSE
by Chris Marshall on Sep 25, 2013 at 08:44
The world’s largest cruise operator, Carnival (CCL.L), was sailing towards another day of rough losses on Wednesday, leading Britain’s FTSE 100 lower.
Amid jitters about a political row in the US about its debt limit – ahead of next Monday’s deadline – as well as the fate of stimulus from the world’s largest economy, European shares followed US and Asian indices lower. Britain’s FTSE 100 was down 0.3% to 6,547, in line with losses on the continent.
The benchmark index has barely budged over the past few days, but remains up 9% over three months. Neil Woodford, one of Britain’s most influential investors, has just warned investors not to expect a continuation of the ‘frenetic’ rise that they’ve enjoyed so far this year, but rather that volatility would increase.
Carnival shares fell 6.7% to £21.06, adding to similar losses yesterday, after analysts at Exane BNP Paribas, UBS and Morgan Stanley cut their recommendations or target prices on the shares. The cruise operator yesterday reported a 30% decline in third quarter profits, alongside a warning of a possible loss for the current quarter.
Analysts at Nomura said Carnival ‘will be dead money for six months’ and they prefer and continue to prefer shares of Royal Caribbean Cruises.
Utility company shares were also down after Labour Party leader Ed Miliband’s pledge yesterday to freeze energy prices if elected, with SSE (SSE.L) off by 3.7% to £15.20 and Centrica (trading ex dividend) lower by nearly 4% at 380p.
Analysts at Liberum said Miliband’s comments triggered a ‘crisis in UK energy policy’ meaning that ‘investors will need to reconsider the relative attractiveness of the UK utility market’.
Amid little major economic data until the US wakes up later, a report on German consumer confidence was the highlight, climbing slightly to its highest level since September 2007 (to 7.1 from 7).
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