Watches of Switzerland clock up after review of ‘tourist taxes’

After the decision of the chancellor to review the tax-free shopping for tourist, some of London’s largest sellers of luxury items were in high demand.

The potential reversal of so-called “tourist tax”, which retailers claim has cost them £1.5billion in lost sales by 2022, may provide a boost for companies like Watches of Switzerland which have been struggling to compete with competitors on the Continent who offer tax-free shopping schemes.

The news boosted the shares of Rolex, Omega, and other watchmakers, which had fallen about 45 percent since the beginning of the year after a profit warning was issued last month. Shares rose 10 3/4p or 3 per cent to 370 1/2p. Burberry has also blamed the slow performance of its UK business on the scrapping the scheme in January 2020. The fashion group gained 8p or 0.6 percent to £12.91. This makes the fashion group among the largest risers of the FTSE 100. Mulberry has also had problems with the “tourist taxes” and rose to 137 1/2p or 10% on Aim.

The list of FTSE 100 gainers was dominated with big-dollar earners who benefited from Sterling’s woes. Exporters who make their money mainly overseas tend to benefit from a fall in the pound. It has fallen to its lowest level since December.

The drink group b>Diageo/b> was up 47 1/2p, or 1.6 percent, at £29.84, while shares in the Dove and Marmite owner b>Unilever/b> increased 53p, 1.4 per cent to £39.18. Diageo the drink group, was up 47 1/2p or 1.6 percent at £29.84. Shares in Unilever Dove and Marmite’s owner Unilever were up 53p or 1.4 percent to £39.18.

GSK extended gains from last Monday when the drugmaker settled a second Zantac lawsuit and raised its sales and profit forecast for the full year. The stock rose 51 1/2p or 3.2 percent to £16.63.

The gains were not enough to lift the market from its negative trend as the economic data out of the United States dampened the expectations for imminent interest rate reductions. Despite the weak pound the FTSE 100 ended less than three points below at 7,612.86, and the UK-focused FTSE 250 retreated 154.09 or 0.8 percent to 19,081.55.

Bond yields increased as stocks dropped, affecting housebuilders. Barratt Developments and Persimmon both fell by 35 1/2p or 2.5 per cent to £14.11, while The online property portal lost 9 1/2p or 1.7 percent to 556 1/2p. Howden Joinery is a supplier of joinery and kitchen products to the building trade. It lost 31 3/4p or 4 percent, reaching 771 1/4p.

Kingfisher was also under pressure when analysts at JP Morgan lowered their pre-tax profits forecasts for 2025 by 10% to £484million. Analysts have also lowered their estimates and opened a ‘negative catalyst watch’ on B&Q before its full year results next month. This has sent the FTSE 100 Group shares down 4 1/2p or 2.1 percent to 210p.

Vodafone also joined them, losing 2 1/4p or 3.3 percent to 66 1/4p after the telecom group reported that service revenue growth had slowed in Germany, the largest market in its third quarter.

Metal prices dropped, and some shares of miners lost their shine. This included Hochschild Mining which lost 2 3/4p or 2.6 percent to 101p. Glencore was down 8 1/4p or 2 percent to 409 1/2p. Anglo American dropped 25 1/2p or 1.4 percentage points to £18.10.

Investors had a difficult session with Serica energy. The stock fell 22p or 11 percent to 178p – a level that has not been seen since September 2021 – after the North Sea oil company reported 2023 production at the lower end its range of guidance due to shutdowns during the second half as well as safety concerns.