United Kingdom

FTSE 100 falls as Reckitt Benckiser's quarterly sales disappoint

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A man shelters under an umbrella as he walks past the London Stock Exchange in London, Britain, August 24, 2015. REUTERS/Suzanne Plunkett/File Photo

  • Reckitt drops to lowest since March 2020, misses estimates
  • FirstGroup CEO plans to step down in September; shares drop
  • Moonpig sees slowing demand on store reopening
  • FTSE 100 down 0.4%, FTSE 250 off 0.2%

July 27 (Reuters) - London's FTSE 100 fell on Tuesday, weighed by insurance and consumer staple stocks, with Lysol maker Reckitt Benckiser adding to the pressure as it missed quarterly sales estimates.

The FTSE 100 (.FTSE) ended down 0.4%, with life insurers (.FTNMX303010) and consumer staple stocks (.FTNMX452010) down 1.8% and 1.4% respectively.

Reckitt (RKT.L) dropped 8.4%, marking its worst day since February 2003, after missing sales growth estimates and warning on margins as costs rise and easing lockdowns slow demand for products such as Lysol disinfectants. read more

Other consumer staple stocks, including Imperial Brands (IMB.L), British American Tobacco (BATS.L) and Associated British Foods (ABF.L), fell by between 0.1% and 1.1%.

"Investors are likely to be questioning the true defensive characteristics of these consumer goods companies," said Danni Hewson, financial analyst at AJ Bell.

"With consumers increasingly flocking to cheaper supermarket own-label products, the idea that the big brand owners are guaranteed sales success is no longer a given. Margin weakness only adds to the bear case for Reckitt."

The FTSE 100 has recovered nearly 26% since its October lows, when the country battled a deadly second wave of COVID-19 infections, amid support from dovish central bank policies.

However, the blue-chip index is still 12% away from its record high and has significantly underperformed its European and U.S. peers.

Meanwhile, Prime Minister Boris Johnson warned Britons should not get carried away by six days of better COVID-19 infection data, while one of the country's top epidemiologists said the bulk of the pandemic could be behind Britain in just a few months. read more

The mid-cap FTSE 250 index (.FTMC) fell 0.2%.

Among other stocks, British online greeting card publisher Moonpig (MOONM.L) tumbled 9.3% after it warned demand would slow in its new financial year as shops reopened. read more

Daily Mirror publisher Reach Plc (RCH.L) gained 6.7% after it said it was trading ahead of expectations and that it expects the strong momentum to continue.

British transport company FirstGroup (FGP.L) fell 0.2% after its Chief Executive Matthew Gregory said he planned to step down in September, a day after the company's biggest shareholder demanded his resignation. read more

Reporting by Shashank Nayar and Amal S in Bengaluru Editing by Amy Caren Daniel and Mark Potter

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