Fire sparks Drax shares sell-off as Santa rally fizzles out
ELECTRICITY generator Drax suffered its sharpest intraday plunge in five months after admitting that a fire at Britain’s largest power plant had sent £10m in earnings up in smoke.
The firm revealed that a fire broke out where highly flammable biomass pellets are offloaded on to a conveyor belt, causing its biomass-fuelled units to shut down for “a short time”.
Its shares tumbled as much as 8.8pc in early trading as news of the earnings setback came just a week after Drax reassured the market that trading was on track. Barclays analysts warned clients that the outage could have an impact on the company’s special dividend.
Drax clawed back lost ground to end just 5.5p, or 2pc, down at 270.9p.
Elsewhere, hopes that a Santa rally could propel stocks to new highs were dampened yesterday, as Donald Trump’s corporate tax cuts being passed turned out to be a turkey rather than a Christmas cracker on the markets.
The hotly anticipated reforms, which will cut corporate tax from 35pc to 21pc, were passed 51-48 in the Senate, but the major breakthrough for what will be the most radical tax reforms in the US for decades couldn’t boost shares across the globe.
The bullish mood lifting stocks in December dissipated, with US stocks stuck in flat territory and those in Europe sinking as sentiment soured late in trading.
The FTSE 100 outperformed its peers across the Channel with its 18.87-point fall to 7,525.22 mitigated by its rising mining stocks.
Elsewhere, Low & Bonar, which supplies materials for Russia’s 2018 World Cup stadiums, plunged 13.3p to 54.5p on the double whammy of a profit warning and its chief executive jumping ship to conveyor belt maker Fenner.
After Low & Bonar admitted the earnings hit, Fenner shareholders didn’t give incoming boss Brett Simpson a warm welcome, with its shares slipping 17.8p to 389.8p.
Apple chipmaker IQE’S year-long surge slammed on the brakes after it reversed a 6pc gain to close 13p lower at 141.8p, despite telling investors that its full-year figures will smash expectations. The Welsh firm’s valuation has skyrocketed over 300pc in 2017 to above £1bn, but its spectacular rise has also alerted hedge funds, with just over 8pc of its shares out on loan to short sellers. Troubled outsourcer
Carillion regained 0.8p to 17p after bringing forward the arrival of its new chief executive, Andrew Davies, to help rescue the firm. Finally, pharma firm Shire dipped 56.5p to £38.64 after declining to comment on takeover speculation a day after City chatter lifted its shares by as much as 4pc.