Asos and Boohoo rocked by Hammond’s web tax
ONLINE clothing giants Asos and Boohoo slumped as a tax crackdown loomed.
Chancellor Philip Hammond said he wanted to take action to help the High Street by levelling the playing field with online competitors with more than 50,000 retail jobs lost so far this year.
Critics say internet giants have an unfair advantage by paying less in business rates and, in the case of some international companies, shifting cash abroad.
Hammond said: ‘We want to ensure that taxation is fair between businesses doing business the traditional way and those doing business online.
‘The EU has been talking about a tax on online platform businesses based on value generated.
‘That’s certainly something we’d be prepared to consider.’
Manchester-based Boohoo fell from 203.9p almost as soon as Hammond’s comments were published around lunchtime. They steadied to close down 2pc, or 4.05p at 199.85p. London-based Asos closed down 0.8pc, or 50p, at 6172p. High Street rival Debenhams rose 1pc, or 0.12p, to 11.64p as its largest shareholder Mike Ashley snapped up House of Fraser out of administration and speculation of a merger grew.
Analyst Neil Wilson said: ‘Are we about to see the House of Debenhams? Or maybe it will be renamed the House of Ashley. This appears the only viable solution; combining the operations to reduce overheads and stop competing against each other.’
The FTSE 100 fell 74.76 points, or 0.97pc, to 7667.01, despite a weaker pound, which normally supports the index.
Russian steelmaker Evraz, down 9pc, or 50.4p, to 510p, was one of the biggest fallers as jitters grew over US sanctions against Russia over the Sergei Skripal poisoning, announced this week.
Other Russia- exposed miners also fell with down 2.3pc, Minerals or 15.6p, to Polymetal 654.2p, and Kaz
down 1.4pc, or 8.8p, to 612.4p. Miners fell sharply across the board as the dollar strengthened to its highest point in 12 months, denting copper prices.
dipped 2.6pc, or Anglo American BHP Billiton 44p, to 1667.6p, as fell 1.4pc, or 24p, to 1696p.
sank 2.7pc, or 9.05p, to Glencore Rio Tinto 321.15p and was down 2pc, or 78.5p, at 3803p.
Rolls-Royce was also in the doldrums after a critical note from JP Morgan, which downgraded the stock to underweight and cut their price target from 965p to 840p. The airplane engine maker has been battling problems with its Trent 1,000 engines deteriorating faster than expected.
JP Morgan analysts said: ‘Relative to other civil aerospace stocks we follow, we think Rolls-Royce now offers investors a less attractive risk-reward.
‘It is currently grappling with a £1.5bn cost overrun related to the Trent 1000, is ramping up production on many new programmes, all whilst planning to cut its workforce by 9pc from 2018-20.’
Travel agent Tui, up 1.5pc, or 23p, to 1565.5p, had a better day, repairing losses from Thursday when it posted a 7.5pc earnings drop fuelled by air traffic control strikes in June.
Cruise operator Carnival was also up 2pc, or 92p, to 4623p.
Ryanair fell 3.7pc, or €0.5, to €12.98, with one flight in six cancelled yesterday amid strikes over pay and conditions.
At the junior end, investment fund Yellow Cake rose 0.6pc, or 1.25p, to 225.25p after announcing it had bought 350,000lb of uranium from Kazatomprom for £6.3m. It plans to store it in Canada and now owns 8.4m pounds of the material used for nuclear power. Bosses believe uranium is under-priced and they can profit when it moves up.