UK shares retreated and shares of Royal Mail hits record low on Tuesday
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UK shares retreated on Tuesday as the positive impact of a deal on North American free trade faded globally and shares of Royal Mail hit a record low the day after the 500-year-old postal service issued a profit warning.
At 0909 GMT, the benchmark FTSE 100 was losing 0.6 per cent at 7,460.75 points but outperforming continental indexes hit by concerns over Italy's 2019 budget.
Britain's listed blue chips failed to receive an accounting boost from the pound falling to a three-week low, with investors growing anxious about a conflict over Prime Minister Theresa May's Brexit plan.
Weighing on the British stock market was Royal Mail, which lost 8.3 per cent and was trading at 360.4 pence, it's the lowest level since it was listed in London in 2013.
"We have been bearish on the outlook for productivity improvements, but yesterday's profit warning was shocking in its scale and timing," Liberum analyst Gerald Khoo said.
Shares of the company, founded under Henry VIII, plunged 18 per cent on Monday after it warned its shareholder's annual profits would be far lower than expected, hurt by eroding logistics business margins and weaker letter volumes.
Ferguson was another big loser, down 4.9 per cent, after the distributor of plumbing and heating products said organic revenue growth in September fell and warned of challenging UK markets.
Uncertainty was still palpable in the travel sector after Ryanair's profit warning on Monday.
Easyjet was down 3 per cent and among smaller companies, Thomas Cook fell 7.3 per cent after both groups' prospects were cut by brokers.
Oil majors were a rare sector of gains with U.S. oil prices hitting their highest level since November 2014 as markets prepared for tighter supply once U.S. sanctions against Iran kick in next month.
BP and Royal Dutch Shell were up 0.5 per cent and 0.3 per cent respectively.
(With inputs from agencies.)
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