Russia and WPP weigh on FTSE 100
RUSSIAN-LINKED miners Polymetal and Evraz were hit by a fresh wave of selling yesterday as the Trump administration lined up new sanctions targeting Vladimir Putin’s inner circle of tycoons.
London-listed stocks controlled by Russian oligarchs with close ties to Putin tumbled after US ambassador to the United Nations Nikki Haley warned that it would punish Moscow’s support for the Assad regime.
City analysts at RBC Capital Markets warned investors that the deterioration in relations between the West and Russia had been “a rapid escalation in risk for companies with Russian-based assets”.
Companies controlled by Putin allies suffered sharp share price falls last week after the White House’s first round of sanctions.
As investors braced for more measures, Roman Abramovich-owned miner Evraz nosedived 27.4p to 365.2p, a 7pc tumble, while Russia-focused Polymetal slipped 64.4p, or 9.6pc, to 611.2p.
Evraz’s fall along with ad giant WPP’s 6.5pc plunge following the exit of boss Sir Martin Sorrell weighed heavily on the FTSE 100. The pound hitting a post-Brexit vote high against the dollar at the end of play ramped up the pressure on the index’s exporters, dragging it to a 66.36-point loss at 7,198.20.
Amid the recent flurry of deals in the healthcare sector, a surge in embattled pharma firm Vectura’s trading volume reignited longstanding bid rumours in the City as it soared 10.6p, or 11pc, to 104.5p.
As Vectura’s trading volume hit eight times its average, City analysts speculated that Vectura losing some of its disgruntled shareholders since its strategy shift may have also relieved some of the selling pressure on the struggler. Pharma giants Novartis and GlaxoSmithKline have been among the names linked with Vectura, which slumped to its lowest level since 2012 in March.
Feared activist investor Elliott Advisors revealing a stake of over 6pc in Costa Coffee owner Whitbread over the weekend boosted its shares 283p to £42.18. The Paul Singer-led hedge fund snapping up a stake stirred speculation that it could push for a break-up of the FTSE 100 company.
Smurfit Kappa advanced 90p to £30.72 after reports surfaced claiming that investors are putting pressure on the paper and packaging giant to hold talks with takeover suitor International Paper.
Barclays nudged up 0.5p to 213.8p as Jefferies analysts argued that activist investor Sherborne taking a large stake in the banking giant could propel its shares higher.
Finally, tech giant Sage’s share price plunge extended into a second session after JP Morgan analysts piled on the pain, downgrading it to “neutral” to knock it 18.6p lower at 598.4p.
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