The UK stock market marked the anniversary of Black Monday in an appropriate fashion with the FTSE 100 dropping 0.5%, although nothing like its 10% plunge 30 years ago.
The blue-chip index shed 40 points to 7,502, weighted down by consumer goods giant Unilever (ULVR) (pictured), which fell 4.5% to £43.46 after a reporting a third-quarter sales increase of 2.6%.
‘Unilever’s third quarter trading update is slightly disappointing with a very weak performance in developed markets, impacted by unfavourable weather in Europe and natural disasters in the Americas,’ said Charlie Huggins, manager of the HL Select fund which holds the shares.
‘Performance in emerging markets has been more encouraging, with volumes returning to growth in the quarter,’ he added.
The mid-cap FTSE 250 retreated from an all-time high yesterday, sliding 172 points to 20,087.
IWG (IWG) contributed to the index’s 0.8% decline, with the workspace group tumbling 36%, or £1.14 to 204.4p, on a profits warning caused weak trading in London.
Acacia Mining (ACAA) offered some upward pressure, jumping 20% to 222p after the Tanzanian government agreed to take a 16% stake in three of its mines after reaching an agreement over an export ban with the company’ shareholder Barrick Gold.
The FTSE Small Cap index also stepped back 14 points to 5,820 as Interserve (IRV) dived nearly 28% to 65.25p. The troubled support services and construction group, which issued a profits alert in September, warned that it risked breaching its bank loan agreements due to a deterioration in trading.
The pound dipped 0.25% to $1.3170 against the dollar after data showing an unexpected 0.8% dip in British retail sales last month, reversing a jump in the previous month. This left third quarter growth at 1.5%, its lowest annual rate in over four years. The figures increase the chance that the Bank of England will postpone an interest rate rise next month, although markets still give it an 80% probability.
The impending constitutional crisis in Spain undermined European markets. Catalonia failed to meet a deadline by Spain’s prime minister to renounce its independence bid, making it more likely that Mariaon Rajoy will impose direct rule on the region. The FTSEurofirst 300 index sanke over 13 points or 0.9% to 1,526.