The London Stock Exchange Group offices are seen in the City of London, Britain, December 29, 2017. REUTERS/Toby Melville/File Photo Acquire Licensing Rights
Nov 10 (Reuters) – London stocks sagged on Friday, with beverage maker Diageo weighing on the FTSE 100 after delivering a grim forecast, while economic data signalling that the British economy failed to grow in the third quarter further clouded risk sentiment.
Diageo (DGE.L) sank 12.2% to a near-three year low after the Johnnie Walker whisky maker said it expected first-half operating profit growth to drop due to “materially weaker performance” in Latin America and the Caribbean.
The beverages index (.FTNMX451010) tanked 11.3%, its worst day since October 1987.
Broadly, the benchmark FTSE 100 (.FTSE) slid 1.3%, while the mid-cap FTSE 250 (.FTMC) dropped 1.0%.
Adding to the gloom, data showed Britain’s stagnating economy failed to grow in the July-to-September period – but at least managed to avoid the start of a recession.
“Real income squeeze has eased relative to last winter,” Chris Hare, senior economist at HSBC global research wrote in a note. “If that trend continues, particularly against a softy global backdrop, it raises a question as to where growth is going to come from over the medium term.”
Still, Goldman Sachs raised the country’s gross domestic product (GDP) growth forecast for the year to 0.6%, from a previous expectation of 0.5%.
UK equities were relatively range-bound throughout the week as investors awaited data to assess domestic economic performance, following a recent skip in monetary tightening by the Bank of England.
The FTSE 100 notched a loss of 0.8% for the week, while the mid-cap index ended the week 0.9% lower.
During early trade on Friday, all FTSE Russell indexes were hit by a technical issue that prevented them being published for forty minutes, index provider parent LSEG said.
Market analysts said it was only index calculations that were affected, while stocks traded normally.
Among other movers, Redrow (RDW.L) said it expects annual profit and revenue to be at the lower end of its forecast range, hurt by a subdued autumn housing market, sending shares of the homebuilder down 4.2%.
The home construction index (.FTNMX402020) declined 2.0%.
Reporting by Khushi Singh and Johann M Cherian in Bengaluru; Editing by Eileen Soreng, Shinjini Ganguli and Alex Richardson
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