Pearson and Whitbread lead UK top flight into the red

London’s blue chip share index has ended the session in the red after a raft of gloomy updates from the likes of Pearson and Premier Inn owner Whitbread.

Education giant Pearson was the biggest faller on the top tier, with shares hitting 11-year lows after its finance chief quit, and as it warned profits will fall once again in 2020.

Optimism over the US-China trade deal quickly faded following the slew of corporate disappointments, sending the FTSE 100 Index down 32.99 points to close at 7609.81.

The FTSE 100 was also pushed lower as the pound regained its poise, having been under pressure amid recent interest rate cut speculation.

With the top flight heavily made up of international mining and oil stocks, which trade in US dollars, gains in the pound often means falls for the FTSE 100.

Sterling lifted 0.2% to 1.31 US dollars and 0.4% to 1.18 euros.

While the UK market came under pressure, it was a different picture on the other side of the Atlantic as the Dow Jones Industrial Average touched above 29,200 for the first time in its history.

Celebrations on Wall Street continued over the US-China phase one trade agreement, with sentiment also boosted by strong US retail sales figures.

But across Europe, the Cac 40 in France and Germany’s Dax finished close to their opening mark.

David Madden, market analyst at CMC Markets, said: “The interim trade agreement between the two largest economies in the world took a long time to be hammered out, so now dealers are wondering what will be the next big story to move the markets.”

In London, Pearson and Whitbread were the two biggest casualties, falling 9% and 5% respectively.

Pearson sent investors heading for the exit once again as it revealed finance director Coram Williams would follow chief executive John Fallon out of the door.

It said adjusted operating profit was flat in 2019 at around £590 million, but will reduce to between £500 million and £590 million in the current financial year.

Its shares tumbled 55p to 563.4p.

Whitbread followed on the fallers’ board after it revealed lower sales as business and leisure bookings took a hit.

In particular, it saw declines in business customers using its hotels outside of London.

Whitbread closed 250p lower at 4587p.

FTSE 250-listed recruitment firm Hays was another big faller as it alerted over profits after saying strikes in France, political uncertainty in the UK, a slowing German economy and the Australian bushfires had taken their toll.

The firm saw shares drop 3% or 5.9p to 166.7p.

Primark owner Associated British Foods was bucking the trend after its update, which showed rising revenues for the budget fashion chain on the back of new store openings.

This overshadowed news of a marginal fall in UK like-for-like sales and helped send shares up 106p or 4% to 2661p.

The biggest FTSE risers were NMC Health up 96p to 1441.5p, Associated British Foods ahead 106p to 2661p, Berkeley Group 148p higher at 4993p and Persimmon 43p stronger at 2850p.

The biggest FTSE fallers were Pearson down 55p at 563.4p, Whitbread off 250p at 4587p, Hikma 64.5p weaker at 1910.5p and DCC 204p lower at 6446p.