Profit downgradings leave sour taste at Tate & Lyle

MARKET REPORT

The bitter taste of profit downgradings unsettled Tate & Lyle. Rumours filtered into the stock market that the sugar group faced a profits shortfall following an unexpected fall in prices of high fructose corn syrup, a key ingredient in foods and soft drinks.

The decline has occurred at a particularly unfortunate time for Tate as it is thought to be negotiating supply contracts with leading US soft drink groups. NatWest Securities is believed to have cut its profit forecast by about pounds 30m to pounds 270m which would mean little-changed profits this year. Kleinwort Benson also turned negative. The shares, nudging 500p last year, fell 15p to 452p, the worst performance by any blue chip.

The Tate & Lyle slide was in sharp contrast to the rest of the stock market which was back in record-breaking form, ignoring, for once, weakness in New York. Footsie rose 23.6 points to 4,219.1 and the supporting FTSE 250 index gained 16.9 to 4,587. Trading was again heavy with volume topping 1 billion shares.

There is a growing conviction that interest rates could remain unchanged until after the election. Confirmation that Christmas trading was far from robust merely strengthened the no-change stance.

New York, sharply lower during London opening, failed to have much impact. The fall, coming on top of another overnight peak, largely reflected the big sell-off in IBM as analysts scrambled to downgrade forecasts following disappointing results.

Vodafone, engaged in investment presentations, continued to dial the right numbers, gaining 15.5p to 276.5p. Orange added 8.5p to 206p.

Waters, paying little attention to Tony Blair's threatened windfall tax, moved with the tide as UBS suggested they were 15 per cent underpriced. Thames Water surged 30p to a 655p peak, up more than 100p since November, and United Utilities rose 15.5p to 679p.

Other utilities were also indifferent to Labour's rhetoric. National Power plugged in a 17.5p gain to 519p and PowerGen 29.5p to 646p.

Zeneca was given another whirl on Roche takeover rumours, up 30p at 1,672.5p. SmithKline Beecham had the distinction of being dragged into the speculation, 22.5p higher to 843.5p.

Insurances, however, had a subdued session. NatWest decided the time was ripe to take profits, taking a particularly bearish stance on Legal & General, off 4.5p to 282.5p, following new business figures. Goldman Sachs said buy Commercal Union, a suggestion which left the shares, after disappointing business figures, 13p off at 702.5p.

Hanson remained firm, 1.75p higher at 93.5p, as its energy demerger neared and Rolls-Royce, an SBS Warburg buy, gained 4p to 246p.

Banks had another resolute session with Royal Bank of Scotland celebrating its Internet scoop with a 6.5p gain to 585p. Fund managers attracted attention following stories that Dresdner, the German bank owning Kleinwort Benson, was looking to buy a fund management company. Henderson Administration gained 32.5p to 1,277.5p and Mercury Asset Management 21p to 1,276p.

Jacques Vert lost some of Tuesday's exuberance following the Littlewoods link, falling 8p to 45.5p, but Verity, ahead of expected bullish comment on its new sound system, rose 4p to 33.5p.

Pan Andean, the explorer, gained 3p to 62.5p on seemingly incorrect rumours a drilling statement was being prepared. The company, which is still examining data collected from last year's dry well, is preparing its interim announcement, which could be encouraging.

Kenmare Resources, which has found a rich gold seam at Niassa in Mozambique, firmed to 35p; there is talk of a cash offer from BHP, the Australian giant with which Kenmare has trading links.

Wickes, the struggling do-it-yourself group, perked up a little as some took the view the rights issue, due to close soon, was attracting a good take-up. The ordinary shares put on 5p to 166.5p and the nil paid rights 5p to 16.5p. Schroders acquired 4 million shares, lifting its stake to 16.47 per cent.

Critchley, an electronic component group, slumped 112.5p to 797.5p on the suspicion its margins were under pressure from the strength of sterling.

Thomas Jourdan, the Corby trouser press mini-conglomerate, jumped 7.5p to 46p. David Abell, who sold Suter to Ascot Holdings, hasbought 2.8 per cent; investors connected with Mr Abell have a further 1.7 per cent. The former Suter chief has denied he plans a bid for Jourdan.

Taking Stock

Monument Oil & Gas jumped 8p to 80.75p. The shares, which normally change a copper at a time, were encouraged by a move into little-known Turkemenistan. With Mobil, the US giant, it will help develop the country's flagging oil industry. There are suggestions of huge oil stocks in Turkemenistan, with some talking of 6 billion barrels. One analyst calculated that if the reserves were 1 billion barrels it would be worth 35p a share to Monument.

Fishers International, firm at 14p, is attracting attention. The loss adjuster and claims manager is believed to be trading well and should produce profits of pounds 1.7m last year with stockbroker Collins Stewart looking for pounds 2.5m this. In relation to other financial groups the shares are not expensive.

Start your day with The Independent, sign up for daily news emails
News
peopleComedian launches stinging attack on PM
Life and Style
The collection displayed Versace’s softer side, with models wearing flowers and chiffon dresses in unusual colourings
fashionVersace haute couture review
News
Andy Murray shakes hands after defeating Andreas Seppi of Italy in the third round of Wimbledon, Saturday 4 July, 2015
Wimbledon
Arts and Entertainment
'The Leaf'
artYes, it's a leaf, but a potentially very expensive one
News
Yoko Ono at the Royal Festival Hall for Double Fantasy Live
people'I wont let him destroy memory of John Lennon or The Beatles'
News
Could Greece leave the EU?
news
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'
Compton Cricket Club

Compton Cricket Club

Portraits of LA cricketers from notorious suburb to be displayed in London
London now the global money-laundering centre for the drug trade, says crime expert

Wlecome to London, drug money-laundering centre for the world

'Mexico is its heart and London is its head'
The Buddhist temple minutes from Centre Court that helps a winner keep on winning

The Buddhist temple minutes from Centre Court

It helps a winner keep on winning
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'