In a sinking market, with leading shares recording their biggest daily drop for nearly seven months, Carnival has managed to keep above the water line.
The cruise company reported a 4.7% rise in third quarter revenue and a jump in net income from $934m to $1.25bn, helped by higher demand for its Asian trips and higher onboard spending. It raised its guidance for the full year from the $1.6 to $1.75 earnings per share its predicted in June to $1.84 to $1.88. Carnival closed 6p higher at £24.43.
But overall the FTSE 100 suffered a 97.55 point fall to 6676.08, its worst performance since 3 March. Poor economic data in the form of disappointing manufacturing surveys from the eurozone set the tone, despite some relief that China and the US performed better than expected.
Geopolitical tensions also played a part, following news of the US air strikes on Syria.
There were a number of corporate factors. Supermarkets were weakened further by Kantar Worldpanel's latest report showing the UK grocery market grew at its slowest rate for more than 20 years. J Sainsbury lost 15p to 263.8p, while Tesco dropped another 8.5p to 194.5p despite parachuting in new finance director Alan Stewart several weeks early. A number of analysts cut their target prices, including Exane BNP Paribas, Nomura, JP Morgan and Deutsche Bank.
Meanwhile several healthcare shares were hit by overnight news that the US has announced new rules to reduce the benefits available to its companies buying overseas businesses for tax reasons.
This makes deals for AstraZeneca, pursued by Pfizer, and Shire, being acquired by AbbVie, and Smith and Nephew, less attractive, said traders. So AstraZeneca dropped 163.5p to £44.14, Shire was down 130p to £51 and Smith and Nephew was off 30p to £10.38. Simon French at Panmure Gordon said:
Overnight the US Treasury Secretary, Jack Lew, announced rules designed to limit recent growth in corporate tax inversions. This has profound implications for the UK biotechnology and pharmaceutical sector which has been the main focus of takeover activity. Well-documented UK-based inversion targets have seen their shares take a hit... However we remain bullish for consolidation in this sector that stands to benefit from a rapidly ageing population and a government that has fostered an accommodating corporation tax regime. A deal in the US Congress on tax simplification - a red line for Republicans to sign inversion legislation - would appear unlikely in an increasingly hostile environment leading up to and beyond the US mid-terms. As such we remain bullish that inversion opportunities have not vanished but must now adapt to a more hostile political backdrop.
Tate and Lyle slumped 122.5p or nearly 17% to 610p after a shock profit warning. The group said disruption in its supply chain and increased competition for its Splenda sucrolose sweetener in the second quarter would hit its full year results. It said it expected additional costs of around £20m in the second quarter taking the total for the first half to £40m. There would be an additional £10m of costs in the second half, meaning it now expected full year profits to be between £230m and £245m. Analysts had been expecting a figure of around £293m.
But with the Chinese manufacturing figures coming in better than expected, mining shares regained some ground, with Rio Tinto rising 49.5p to £31.08 and BHP Billiton 11p better at 1741.5p.
Elsewhere Go-Ahead accelerated 38p to £24.81 after Deutsche Bank moved from hold to buy and raised its target price on the transport group from £22.70 to £27.90.
Spirit Pub Group jumped 13.25p to 88.75p after brewer and pub owner Greene King, up 0.5p at 794p, confirmed a report in the Financial Times that it had made an approach for its rival, said to be worth more than £700m.
Finally stockbroker Panmure Gordon put on 14.5p to 155p as it announced first half profits grew from £0.3m to £1.9m and a gave a positive outlook for the second half.
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