LONDON MARKETS: FTSE 100 Gives Up Ground; Unilever Slips After Hurricanes Hurt Sales

By Carla Mozee, MarketWatch Features Dow Jones Newswires

U.K. retail sales on deck

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U.K. stocks lost ground Thursday, with shares of consumer products heavyweight Unilever PLC falling after its earnings report, as investors waited for figures on retail spending by British consumers.

The FTSE 100 index lost 0.5% to 7,504.70, led by a drop in consumer goods and services shares, as well as in basic materials stocks. Losses were deepening alongside a fall in U.S. stock futures (http://www.marketwatch.com/story/us-stock-futures-tumble-with-ebay-apple-other-tech-stocks-taking-a-hit-in-premarket-2017-10-19) and after the Shanghai equities market closed 2.1% lower.

The London benchmark on Wednesday rose 0.4% (http://www.marketwatch.com/story/ftse-100-rises-as-eyes-turn-to-wages-data-2017-10-18) to 7,542.87, just shy of its record close of 7,556.24 logged last week.

Hurricanes blamed: Unilever (ULVR.LN) was among Thursday's decliners. Shares fell 3.2% after the company behind brands including Ben & Jerry's and Dove reported weaker revenue growth of 2.6% in the third quarter. Analysts had been looking for growth of 3.9%.

Sales growth was hurt by poor weather in Europe and natural disasters in the Americas, the consumer products company said.

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"There's really no growth in the U.S. business," Unilever Chief Financial Officer Graeme Pitkethly said in an interview (http://www.marketwatch.com/story/unilever-sales-disappoint-on-us-hurricane-impact-2017-10-19). "But the big one-off impact that caused us to miss against consensus this quarter were the hurricanes in Florida and Texas."

U.K. shoppers: Investors are watching for a check on spending by British consumers due Thursday morning. Retail sales are expected to have increased 2.3% in September year-on-year but to have fallen month-on-month, according to a FactSet survey of economists.

"We believe that there's a strong chance of a surprise higher in the retail sales report, as the consumer spending data earlier in the month suggests that demand should remain strong," said Konstantinos Anthis, a research analyst at ADS Securities.

"Having said that, it is unlikely that even a stronger reading today will alleviate traders' concerns on how determined the Bank of England is to raise rates by the end of the year, and this should keep the pound from extending its gains."

This week, reports showed real wages fell for the sixth time in a row in August and that consumer price inflation hit 3%, a percentage point above the Bank of England's target.

Ahead of the retail sales data, the pound traded at $ 1.3168, down from $1.3205 late Wednesday in New York. The report is scheduled for release at 9:30 a.m. London time, or 4:30 a.m. Eastern Time, from the Office for National Statistics.

Stock movers: London Stock Exchange Group PLC (LSE.LN) shares were down 1.2% after the company said Chief Executive Xavier Rolet plans to step down by the end of December 2018. (http://www.marketwatch.com/story/lse-revenue-up-18-ceo-xavier-rolet-to-leave-2017-10-19)

Travis Perkins PLC shares (TPK.LN) picked up 3.7%. The building materials supplier said third-quarter comparable sales rose (http://www.marketwatch.com/story/travis-perkins-sales-up-business-on-track-2017-10-19) and that it expects to meet its full-year expectations.

Off the main benchmark, IWG PLC (IWG.LN) plunged 33%, after the workspace provider said an anticipated improvement in third-quarter sales has been weaker than expected.

(END) Dow Jones Newswires

October 19, 2017 04:27 ET (08:27 GMT)