U.S. Markets closed

FTSE 100 ends in the red for third session as Vodafone, Reckitt drag

A worker shelters from the rain under a Union Flag umbrella as he passes the London Stock Exchange in London, Britain, October 1, 2008. REUTERS/Toby Melville/File Photo

By Shashwat Awasthi and Muvija M

(Reuters) - Britain's FTSE 100 ended lower for the third consecutive session on Thursday as weak sector earnings hurt Vodafone and Rentokil while comments from the U.S. Commerce Secretary cast doubt over the prospects for a resolution of the trade dispute with China.

The FTSE 100 closed down 0.4 percent, on track for its worst weekly performance since early December, while the more domestically focused FTSE 250 edged higher by 0.2 percent.

U.S. Commerce Secretary Wilbur Ross said the United States and China were "miles and miles" from resolving their trade issues, but added that there was a fair chance the two countries would strike a deal.

Vodafone fell 3.5 percent to its lowest since November after its South African unit reported a slowdown in service revenue growth and was the biggest drag on the blue-chip index.

Pest control company Rentokil was also among big fallers, sliding 3.3 percent after results at U.S. peer Rollins missed Wall Street expectations.

Broader sentiment continued to outweigh Brexit uncertainties. The European Parliament's Brexit group said it would not approve a Brexit deal that did not contain a full "backstop" provision to avoid a hard Irish border.

European companies have been stockpiling inventories and setting up units outside the UK ahead of Brexit. The latest jolt came from Airbus, which warned it could shift wing-building out of Britain in the absence of a smooth exit from the European Union.

Despite a looming March 29 deadline, there is very little clarity on how Britain's exit from the EU will pan out. The uncertainty was a major factor behind the European Central Bank downgrading its growth risk assessment, according to ECB President Mario Draghi.

Gary Waite, portfolio manager at Walker Crips Investment Management, said that with various permutations of possible Brexit, it is "really impossible to say with any certainty what road we're going to go down".

Consumer goods maker Reckitt Benckiser fell 3.3 percent to a more than eight-month low as Jefferies downgraded the stock in the wake of the departure of its longstanding CEO.

Outperforming the index was wealth manager St James's Place, which climbed 2.2 percent after beating forecasts for net inflows of client cash in a tough fourth quarter for global markets.

Just after noon, British Airways owner IAG jumped to session highs after it ruled out a bid for Norwegian Air and said it would sell its remaining stake in the budget airline. IAG added 0.3 percent on the day.

The mid-caps were buoyed by financial stocks, led by a more than 10 percent bounce in Metro Bank and Sanne Group. Both stocks had slumped in the previous session in news-related moves.

Earnings also impacted mid-cap shares. Frankie & Benny's owner Restaurant Group was the top faller, down 4 percent after predicting lower full-year like-for-like sales.

Just Eat added 2.4 percent after a JP Morgan upgrade while homebuilder Crest Nicholson shed 2.1 percent, with a trader citing a rating downgrade.

CMC Markets rose 2.8 percent as the Sino-U.S. trade tensions boosted client activity on its online trade platform in the third quarter. Shares of rivals IG Group and Plus500 also rose.

Among small-caps, NCC Group tanked 31 percent to its lowest since April 2017 after it guided to lower full-year EBIT and said sales in the UK were held back by softer demand.

AIM-listed tonic water maker Fevertree jumped 13.5 percent on its best day in more than 14 months after guiding to an almost 40 percent surge in full-year revenue.


(Reporting by Shashwat Awasthi and Muvija M in Bengaluru and Helen Reid in London; Editing by Catherine Evans)