UK share prices watch: Croda tumbles on Tuesday
Croda International (LON:CRDA) is among this Tuesday’s UK share prices to watch, having fallen to the bottom of the FTSE 100 leaderboard, suffering a rating downgrade at UBS. Broader market sentiment meanwhile remains upbeat in the wake of the US-China presidents’ meeting last week which is still fuelling appetite for riskier assets.
Croda deep in negative territory
Shares in Croda have been sold off in today’s session as UBS trimmed its rating on the speciality chemicals maker. Proactive Investors quoted the analysts as commenting that there is growing evidence of a ‘material slowdown’ in the US cosmetics market which could dent sales across the pond. The potential headwinds mean UBS is now relying ‘less comfortably’ on second-half growth in order for its targets to be hit. Croda’s shares have given up about 4.7 percent in early afternoon trade, as compared with about a 0.6-percent gain in the benchmark FTSE 100 index.
Advertising giant WPP (LON:WPP) has remained among today’s notable UK share prices, drifting lower as it confirmed last night that it had entered into exclusive discussions with Bain Capital for the sale of a majority shareholding in Kantar, with a headline enterprise value of about $4 billion. The update came after the ad giant agreed the sale of its interest in sports, entertainment and communications group Chime, saying that the disposal was in line with its new strategy to focus on its main areas of business and simplify its operations through the disposal of non-core assets. WPP’s share price is about 2.3 percent worse off.
In blue-chip risers, shares in Wm Morrison Supermarkets (LON:MRW) have been in demand even as the FTSE 100 grocer adjusted its 2018 profit lower to reflect the new IFRS 16 lease standard. The company, however, reassured investors that the new rules will have no economic effect on the business or cash flow. The blue-chip retailer said that its first financial statements to be prepared under IFRS 16 will be the 2019/20 interims, scheduled to be reported on September 12. Morrisons’ shares are changing hands about 1.5 percent higher.
Housebuilders meanwhile are underperforming the broader UK market as the latest HIS Markit/CIPS UK construction purchasing managers’ index (PMI) revealed a sharp loss of momentum for the UK construction sector, with business activity and incoming new work both falling at the fastest pace for just over 10 years.
“The latest survey reveals weakness across the board for the UK construction sector, with house building, commercial work and civil engineering activity all falling sharply in June,” Tim Moore, Associate Director at IHS Markit, which compiles the survey, commented in a statement, adding that “greater risk aversion has now spread to the residential building sub-sector, as concerns about the near-term demand outlook contributed to a reduction in housing activity for the first time in 17 months”. The numbers have impacted London-listed housebuilders, with Persimmon (LON:PSN) trading about 1.4 percent lower, and Barratt Developments (LON:BDEV) and Taylor Wimpey (LON:TW) also underperforming the market with a 0.1-percent and a 0.3-percent fall, respectively.
UK share prices to watch tomorrow
While this week so far has been marked by a lack of high-profile updates, tomorrow will see J Sainsbury (LON:SBRY) post its first-quarter results in the wake of its collapsed merger with Walmart’s Asda.
“Sainsbury’s trades at just nine times forward earnings, the lowest level sine 2014 and well below the five year average of 12.1. These low expectations allow for positive surprises, but there is little in the way of growth at present,” Chris Beauchamp, chief market analyst at IG, commented in a note last week, adding that the grocer’s chief executive “Mike Coupe has much work to do, if he is to restore a measure of shareholder confidence following the collapse of the Asda deal”.
Other UK share prices to watch tomorrow will include Purplebricks (LON:PURP) which is scheduled to post its full-year results tomorrow, for the 12 months ended April 30. The update will come after the AIM-listed real estate agency said in May that it expects its revenue to come in between £130 million and £140 million, as guided in February. Cash balances as at April 30 meanwhile are expect to be not less than £62 million.
Mark Kleinman, city editor of Sky News and City A.M. columnist, meanwhile tweeted today that the online estate agent would disclose tomorrow that its board has decided to withdraw from the US market.