* FTSE 100 down 0.4 percent
* Diageo knocked by bearish analyst comment
* BT top riser as returns to revenue growth
By Tricia Wright
LONDON, Jan 31 Britain's top shares fell on
Friday, weighed down by spirits company Diageo on
bearish analyst comments.
The company's shares fell 1.7 percent, one of the biggest
drags on the FTSE 100, as various investment houses including
Goldman Sachs weighed in on the company a day after it said its
revenues were impacted by emerging market weakness.
Goldman Sachs removed Diageo from its Conviction List and
downgraded its rating on the stock to "neutral".
"We expect the softer performance in 1H to continue into 2H
and see potential for continued EM challenges in FY15," the
investment bank wrote in a note.
BT, meanwhile, rose 2.9 percent, topping the FTSE 100
leader board, after it returned to quarterly revenue growth for
the first time in four and a half years, driven by record
customer demand for superfast broadband and its growing new
sports TV service.
"For me, the figures are impressive, especially given the
growth comes from an area which was new territory for BT, namely
BT sport," said Jordan Hiscott, sales trader at Gekko Global
"The shares have had an impressive run... even so, this
morning I have real money accounts increasing positions from
previously held longs," he added.
The FTSE 100 was down 24.70 points, or 0.4 percent,
at 6,513.75 points by 0928 GMT, having edged 0.1 percent lower
on Thursday following a torrid few sessions in which the index
dropped more than 4 percent, putting it on course to record a
loss of around 3 percent for January.
After an encouraging start to the year, which saw the UK
benchmark post gains in the first two weeks, equity markets took
a turn for the worse as unease about slowing Chinese growth and
the withdrawal of U.S. monetary stimulus spread from emerging
market currencies to the world's big stock markets.
While the situation in emerging markets is still fragile,
even after some central banks took action to try to prop up
tumbling currencies, markets are starting to stabilise.
Wall Street saw good gains overnight as social media company
Facebook led a tech rally after delivering its strongest
revenue growth in two years, beating analysts' estimates.
Investors take a keen interest in U.S. earnings, where the
reporting season is at a more advanced stage than our own, given
that around a quarter of UK companies' revenues come from the
"I think possibly what's starting to come into investors'
consciousness is that some of these corporate results that we're
seeing from the fourth-quarter (U.S.) reporting season are
actually stronger than had been feared and that's one of the
building blocks for any progress (in) the market," Richard
Hunter, head of equities at Hargreaves Lansdown, said.
"It gives some... vindication to what the Fed's done in its
further taper (scaling back of stimulus)."
Of the 23 percent of S&P 500 firms to have reported, 63
percent have met or beaten on revenue, while 72 percent have met
or beaten on earnings, Thomson Reuters Starmine showed.