FTSE falls after disappointing news from Reckitt and St James’s Place

28 February 2024, 17:44

Dettol handwash stand
London market report. Picture: PA

Reckitt said that it had found ‘an understatement’ in some of its costs, while St James’s put aside nearly half a billion to repay customers.

Shares in London had a bad day on Wednesday led by disappointing news from Reckitt and St James’s Place.

The FTSE 100 fell 58.04 points, to close the day down 0.76% at 7,624.98.

It was a fall decided to a large extent by news released by companies on the index, rather than the macro climate.

Shares in wealth manager St James’s Place actually managed to claw back some of their intra-day losses, but still ended down a massive 18.55%.

The business warned that it had put aside £426 million which it might need to refund customers who were not given the service they were paying for over several years.

It had been getting increased levels of complaints in late 2023, the business said.

Elsewhere, shares in Dettol maker Reckitt plunged 13.29% after the company revealed that “an understatement” in its trade expenses in its system would have a £35 million hit on profits while the business would take a £55 million hit from a discrepancy in the financial reporting in its Middle East business.

The FTSE’s fall set it apart from some of its global rivals. In Frankfurt, the Dax index rose 0.25%, while Paris’s Cac 40 closed up 0.08%.

“Weaker-than-expected Eurozone economic sentiment … dragged stocks down, except for the German Dax 40 index which hit yet another record high as investors pile into it,” said Axel Rudolph, senior market analyst at online trading platform IG.

“The latest earnings season highlighted that European stocks remain undervalued compared to US stocks in terms of PE (price-earnings) ratios which is why investors continue to favour investing in Europe’s largest economy.”

In New York, a little while after markets had closed in Europe, the S&P 500 was trading down 0.06%, while the Dow Jones was 0.19% lower.

On currency markets, the pound was trading 0.17% lower against the dollar at 1.2663 and had dropped 0.11% against the euro at 1.1685.

In other company news, Vodafone announced that it is in talks to sell off its Italian arm to Swisscom in an 8.0 billion euro deal (£6.8 billion).

The company’s shares seemed little impacted, falling 0.16% by the end of the day.

Elsewhere, shares in Direct Line soared 20.95% after the insurer revealed that it had rejected a £3.1 billion takeover approach from Belgium’s Ageas.

The biggest risers on the FTSE 100 were: Rolls-Royce, up 11.9p to 370.5p; JD Sports, up 2.8p to 117.7p; Beazley, up 12p to 652.5p; Smurfit Kappa, up 52p to 3,334p; and Kingfisher, up 3.2p to 233.7p.

The biggest fallers on the FTSE 100 were: St James’s Place, down 115.2p to 505.8p; Reckitt, down 776p to 5,062p; Smith & Nephew, down 65.5p to 1,048.5p; Taylor Wimpey, down 6.7p to 133.85p; and Halma, down 87p to 2,278p.

By Press Association