De­fence firms drag FTSE to month low

The Daily Telegraph - Business - - Business - TOM REES

STOCKS across Europe spent a third ses­sion in the red as the turn in sen­ti­ment on the mar­kets dragged eq­ui­ties fur­ther off their re­cent highs.

The MSCI World In­dex climbed to its high­est ever level last Wed­nes­day but a shock sell-off in Tokyo the fol­low­ing day sparked a slide in stocks that con­tin­ues to plague eq­ui­ties in Europe, ac­cord­ing to CMC Mar­kets an­a­lyst David Mad­den.

An­a­lysts have also pinned mar­ket jit­ters on the de­lays faced by Don­ald Trump’s tax re­form plans and un­ease over whether re­cent earn­ings jus­tify frothy stock val­u­a­tions.

The Euro STOXX 50, the euro­zone’s blue-chip in­dex, fell an­other 0.5pc, bring­ing its three-day re­treat to 2.2pc, while the CAC 40 in Paris and DAX in Frank­furt have lost 2.4pc and 2.3pc re­spec­tively, over the same pe­riod.

The FTSE 100 es­caped the very worst of the down­ward turn in sen­ti­ment, how­ever, aided by the pound slip­ping as sharp­en­ing knives at Tory HQ threat­ened to plunge the UK back into an­other pound-bat­ter­ing pe­riod of po­lit­i­cal in­sta­bil­ity.

Ster­ling shed as much as 1pc against the dol­lar dur­ing in­tra­day trade be­fore set­tling at a 0.7pc loss, just above $1.31, as re­ports sug­gested that 40 Tory MPs are ready to sign a let­ter of no con­fi­dence in Prime Min­is­ter Theresa May.

The UK blue-chip in­dex’s 17.81-point re­treat to 7,415.18 pulled it down to a fresh one-month low with de­fence gi­ants BAE Sys­tems and Bab­cock

In­ter­na­tional weigh­ing heav­ily. Ul­tra Elec­tron­ics’ grim di­ag­no­sis of the UK’s de­fence sec­tor in its profit warn­ing weak­ened the en­tire sec­tor with the FTSE 350 Aero­space and De­fence In­dex tum­bling 3.3pc. Blue chips BAE and Bab­cock In­ter­na­tional plunged 19p to 537p and 59.5p to 753p re­spec­tively, while among mid caps

QinetiQ, which up­dates the mar­ket later this week, slipped 14.6p to 214.2p.

Ground en­gi­neer Van Elle dived 12.5p, or 13.3pc, to 81.5p af­ter The

Sun­day Tele­graph re­vealed that the firm is en­gulfed in a board­room bat­tle. The com­pany’s founder and for­mer chair­man Michael El­lis is at­tempt­ing to wrest back con­trol from chief ex­ec­u­tive Jon Fen­ton, af­ter be­com­ing con­cerned about the run­ning of the com­pany with key mem­bers of staff jump­ing ship and fi­nan­cial fore­casts ap­pear­ing to mis­match with in­ter­nal per­for­mance fig­ures.

Shares in Coca-Cola HBC, one of the largest bot­tlers of the fizzy drinks gi­ant’s prod­ucts, fell 115p to £24.70 af­ter JP Mor­gan said that a deal to snap up a stake in Coca-Cola Bev­er­ages Africa might have lost its fizz. Co­caCola is ex­pected to dis­pose its 54.5pc stake in CCBA in 2018 and CCHBC has been mooted as the most ob­vi­ous buyer. How­ever, the re­cent de­cline in prof­itabil­ity at the African bot­tler means an ac­qui­si­tion will bump up earn­ings by less than ex­pected.

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