Reuters: Hot Stocks: Britain's FTSE dragged down by Unilever warning

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Britain's FTSE dragged down by Unilever warning Oct 1st 2013, 07:38 Tue Oct 1, 2013 3:38am EDT * FTSE 100 down 0.2 pct * Unilever sales warning hits Reckitt, SABMiller * U.S. non-farm payrolls timing a concern By Toni Vorobyova LONDON, Oct 1 (Reuters) - Britain's top share index entered the final quarter of 2013 on a cautious note on Tuesday, with a warning of lower sales at Unilever hitting other companies exposed to emerging markets. Unilever, the 14th biggest company in the FTSE 100, fell 3.9 percent to an 11-month low. The consumer goods company said a slowdown in its emerging markets has accelerated and cut its third quarter sales expectations. Analysts at Nomura cut their earnings per share forecast and target price on Unilever by 6 percent and said the warning "creates uncertainty for some peers", such as Reckitt Benckiser . Shares in Reckitt were down 1.5 percent. Drinks companies SABMiller and Diageo also suffered, down 2.9 and 1.7 percent, respectively. Unilever was the 17th least shorted stock on the FTSE 100 with just 0.55 percent of the shares available out on loan, according to Markit, well down from just below 4 percent in June, suggesting the market was not anticipating the warning. "Our client base trades Unilever from the long perspective, because of its quality brands ... but it seems that consumers are going for the budget brads over the premium ones," said Jordan Hiscott, trader at Gekko Global Markets. "So the move down this morning has caught some of our clients out. We've got liquidations of long positions." Falls in Unilever and its peers saw the FTSE 100 underperform the broadly firmer pan-European FTSEurofirst 300 . The British blue-chip index was down 11.85 points, or 0.2 percent, at 6,450.37 points by 0724 GMT, holding just above the previous session's three-week lows. Investors took a sanguine view of a widely expected partial shutdown of the U.S. government, which began overnight, potentially putting up to 1 million workers on unpaid leave, closing parks and stalling medical research. Although there were no signs of a resolution on the budget - which is needed to resolve the shutdown - analysts took the view that a compromise will be found soon, and that politicians will also agree over raising the debt ceiling later this month, thus avoiding a U.S. sovereign default. "As long as they can get a deal in before Friday, I think the volatility of the market should decrease," said Hiscott. "The risks is if they move (U.S.) non-farm payrolls data from Friday to a later date, then that creates a bit of uncertainty because you have a lot of options OTC (over-the-counter) contracts around that date." ($1 = 0.6175 British pounds) (Additional Reporting by David Brett; Editing by John Stonestreet) Link this Share this Digg this Email Reprints

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