FTSE 100 watch: Earnings worries weigh on the Footsie

on Nov 19, 2013
Updated: Oct 21, 2019
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iNVEZZ.com, Tuesday, November 19: The FTSE 100 has declined today tracking Asian equity markets and Wall Street lower due to concerns that the US Federal Reserve might start to scale back its quantitative easing programme. Market sentiment was further dampened by activist investor Carl Icahn’s words of caution on equities and earnings. Among the few bright spots today has been easyJet, whose shares (LON:EZJ) have added some seven percent after the budget airline posted a strong set of annual results.

**Footsie slips on earnings concerns**
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As of 11:33 UTC today, the Footsie had fallen 30.87 points, or 0.46 percent, to 6,692.59, erasing the gains from the previous session.
Speaking at a Reuters investment summit, Carl Icahn yesterday warned that he was ‘very cautious’ on equities. Reuters quoted Icahn as saying the stock market could face a ‘big drop’ with earnings at many companies fuelled more by low borrowing costs than by management efforts to boost results.

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CNBC quoted Michael Hewson, chief market analyst at CMC Markets, as pointing out that investors were getting to the point where they cared less about the fundamentals of the markets and the companies in which they invested, and more about the direction of policy of the central banks, and in particular the Federal Reserve.
“You would have thought that it would take more than some cautious comments from billionaire investor Carl Icahn to cause a bit of a pullback,” Hewson noted. “This unhealthy obsession does appear to be raising concerns.”

Today, investors are waiting for Fed Chairman Ben Bernanke’s speech ahead of tomorrow’s release of minutes from the Federal Open Market Committee’s October meeting which will be scrutinised for fresh clues as to when the US central bank might start tapering its bond-buying programme.
**FTSE 100 winners and losers**
Top of the Footsie winners so far today has been easyJet, whose shares soared after the company posted a record pre-tax profit of £478 million for the 12 months to the end of September. (EasyJet share price jumps on record annual profit) As of 12:06 UTC, shares in the low-cost carrier had added 7.36 percent to 1,348.42p.

Shares in GlaxoSmithKline (LON:GSK) also rose, climbing 1.03 percent to 1,630.17p. The company yesterday said that the European Commission had granted marketing authorisation for the Relvar drug for treating asthma and chronic obstructive pulmonary disease (COPD).

At the other end of the spectrum, testing services specialist Intertek Group (LON:ITRK) shed 3.96 percent to 3,055.00p after the company said in its interim management statement that headwinds experienced in the first half of the year persisted into the second half.
Yesterday’s standout winner Aberdeen Asset Management (LON:ADN) lost 2.53 percent to 477.20p with the decline attributed to profit-taking.
ITV’s (LON:ITV) share price gave up 2.19 percent to 182.70p despite the broadcaster posted a rise in nine-month revenue. (ITV share price little changed as nine-month revenues rise) Reuters quoted Citi analysts as pointing out that while the near-term picture for ITV was robust, there was no significant upward pressure on forecasts with the consensus estimate for full-year advertising revenue already at 1.9 percent.
**The FTSE 100 was 0.56 percent down at 6,685.79 points as of 12:23 UTC on 19 November 2013.**
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Prices can go up and down meaning you can get back less than you invest. This is not advice. Dealing services provided by Hargreaves Lansdown.
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