* FTSE 100 falls 0.1 pct
* Diageo sales growth slows due to EM weakness
* BSkyB, Shell reassure with company updates
By Alistair Smout
LONDON, Jan 30 British blue-chip shares fell for
the seventh time in eight sessions on Thursday, led lower by
Diageo after it flagged weakness in emerging markets.
The FTSE 100 index was down 0.1 percent, or 8.95
points, at 6,535.33 by 1543 GMT, nearing its lowest level since
mid-December. It has suffered in recent sessions from a selloff
in emerging markets that continued on Thursday.
Shares in Diageo dropped 4.5 percent, taking the most points
off the FTSE, after the world's biggest distilled spirits
company reported slower net sales growth due to weakness in
China, Thailand and Nigeria.
Diageo had revealed similar struggles last October in
markets such as Turkey and Russia.
"Diageo will be very disappointed with Asian sales, as they
were looking to tap into demand from those growing markets for
the more chic spirits," said Alastair McCaig, analyst at IG.
Peer SABMiller also fell, by 1.4 percent, and other
consumer staple stocks dropped on expectations that emergings
market turmoil, which hit earnings in the summer of 2013, would
again hit their results.
Social unrest and currency problems in emerging markets such
as Thailand, Turkey and Argentina have knocked back global
equities this week, accentuated by the U.S. Federal Reserve's
decision to trim its stimulus programme further.
"Emerging markets are a concern, certainly in the short
term. We've been down this road before, however, and there won't
be as big a reaction as the global economy is in a good enough
shape this time around to take us out of the mire," said Mike
McCudden, head of derivatives at Interactive Investor.
"Companies that do have big exposure to emerging markets,
such as Diageo, will be impacted, but as a company it is well
placed to get through it."
Despite concerns over emerging markets, many investors still
expect the FTSE to eventually hit a record 7,000 points in the
first quarter, helped by signs of a gradual rebound in the
British and world economies.
Among top gainers were BSkyB and Royal Dutch Shell
after they delivered reassuring earnings reports, in
contrast to Diageo.
Shell's report included steps to improve returns after a
profit warning two weeks ago knocked its stock price.
So far this earnings season, 87 percent of those companies
on the FTSE 100 who have reported results have met or
beaten expectations, although some reports had been preceded by
"Earnings are coming in line or beating expectations as a
whole, but there is a lot of guidance that is considerably less
confident. It's more than just downplaying expectations, as a
lot of companies seem genuinely worried," IG's McCaig said.
The latest profit warning came from embattled mid-cap
outsourcer Serco, which fell 17.3 percent after saying
profit could be as much as 20 percent below forecasts, also
sending blue chip peer G4S 3.2 percent lower.