By Sruthi Shankar and Bansari Mayur Kamdar
(Reuters) – UK’s top share index was subdued on Tuesday as worries about an energy crisis in the continent and a weakness in British retail and banking stocks offset gains in commodity-linked stocks and an upbeat sales forecast from Unilever.
The blue-chip FTSE 100 was flat at close after rising as much as 0.8% in early trading, with oil major Shell and miner Glencore among the top boosts as commodity prices climbed on the back of a softening dollar. [MET/L] [O/R]
Unilever Plc shares rose 2.9% to their highest in more than seven months after the consumer giant raised its full-year sales guidance as it hiked prices to counter soaring costs.
“With the cost of living soaring, consumers are really having to make that choice around where they spend their pound/euro/dollar,” said Nicola Morgan-Brownsell, fund manager at Legal & General Investment Management.
“The majority will have to be on maintaining the basics in life.”
Adding to concerns, Russia said it would cut gas supplies to Europe from Wednesday, stoking fears of an energy supply crunch at a time when investors are worried about a recession.
Weighing on the benchmark index, Vodafone fell 5.2% after UBS and JP Morgan cut the telecom operator’s target price.
Banking stocks declined 0.8%, with Barclays leading losses after publishing terms on Monday to buy back up to $17.6 billion of securities sold in breach of U.S. regulations.
The midcap FTSE 250 index, packed with companies exposed to the domestic economy, slid 1.2%.
Wickes slumped 18.0% to a record low after the home improvement retailer forecast full-year profit below market expectations and flagged signs of softening in both do-it-yourself (DIY) and do-it-for-me (DIFM) markets in recent weeks.
Meanwhile, overnight, top U.S. retailer Walmart Inc slashed its profit forecast as surging prices for food and fuel prompted customers to cut back on discretionary purchases.
UK’s retail index declined 4.9%.
Travis Perkins, Britain’s biggest seller of building materials, down 6.0%, while rival Kingfisher dropped 8.5%.
(Reporting by Sruthi Shankar and Bansari Mayur Kamdar in Bengaluru; editing by Uttaresh.V, Saumyadeb Chakrabarty and Angus MacSwan)
