Primark owner ABF sends FTSE lower ahead of GDP figures

It may be the lull between bank holidays, but it's a busy news day and so far, the market doesn't like it.

A host of major companies are reporting figures, while the UK GDP figures are due shortly, with hopes of a recovery from last quarter's decline. Later comes US Federal Reserve chairman Ben Bernanke's first press conference following an interest rate setting meeting.

With all that going on the FTSE 100 has slipped lower after yesterday's upbeat performance, down 18.07 points at 6051.29.

Amid those reporting, Associated British Foods is leading the index lower, down 64p at 981p after the Silver Spoon sugar and Primark owner announced a 7% rise in half year profits to £353m but warned of a number of challenges. It said Primark's margins in the second half would be lower than expected as it kept its low price policy, while the cost of sugar production was rising. Martin Deboo at Investec said:

ABF has posted a strong first half, well ahead of consensus, but is guiding to a much more difficult second half which we think will lead to modest consensus downgrades for 2011. Closely-watched margin guidance on Primark is 'lower
than planned' and we hold to our view that Primark margins will dilute by close to 200 basis points for the full year. We are now looking for a share price correction as a potential entry point into ABF's still-strong sugars story.

Barclays BP

Aggreko is leading the FTSE 100 risers, up 66p at £17.76, a record high, after the temporary power supplier said trading profits would be slightly ahead of 2010.

Away from results, Smith and Nephew slipped 27.5p to 642.5p on fading bid hopes as US rival Johnson & Johnson paid $21.5bn for Swiss group Synthes. S&N shares also went ex-dividend. Brian White at Shore Capital said:

We continue to believe that further consolidation will remain a feature of the medical device sector with companies chasing fewer end customers. However, given the overlap in orthopaedic reconstruction, still the majority of S&N's business, and ongoing concerns over metal on metal implants (principal reason for weakness at both J&J's DePuy business and S&N), we believe that a potential business combination between S&N and J&J makes less strategic sense. Moreover, the size of the Synthes deal at $21bn represents a large chunk of J&J's $27bn in cash.

has dropped 12.05p to 289.8p after a 9% fall in first quarter profits, missing City forecasts, but bounced 4.1p to 468.3p despite a 2% drop in three month earnings and an additional $400m charge relating to the Gulf of Mexico oil spill.