FTSE retreats as traders sell out
HOW would it feel to know all your hard work over the past seven months was for nothing? Spare a thought for investors in the blue-chip index, as the entire gains made in 2015 have disappeared.
The all-time high of 7119.35 back in April is now a distant memory. Another 1.14pc, or 74.68 points, were lost from the FTSE 100 yesterday to 6505.13 – back to levels seen at the end of 2014.
The tumbling stock market in China and continued concerns in the eurozone have kept stocks around the world in the red as traders pushed the sell button again.
Mining, oil and banks were the stocks that have dragged down the index since the peak in April, according to Accendo Markets.
Mike van Dulken, the spread-betters’ head of research, said: ‘The Footsie’s exposure to raw material and banking stocks is really hurting the index.’
Mining stocks have been hit by the continued concerns about the slowdown of China’s economy, while oil stocks have been damaged by the collapse in the oil price since last year. Tony Cross, market analyst at Trustnet Direct, said investors had ‘returned to their desks like bears with sore heads’.
He added: ‘Poor industrial data heaped more concern over China’s wilting economy, while the government’s intervention has done little to calm its stock market, which experienced one of its worst days in its history.’
The FTSE 250 was not in any better shape and fell 231.55 points to 17267.56.
Stocks might be suffering but results from miner Petra Diamonds revealed just how tricky the diamond market can be too.
Full-year revenue tarnished 10pc to £273m and it warned the market was experiencing ‘challenging operating conditions’. Chief executive Johan Dippenaar said the strong US dollar and a slowdown in China’s economy had hurt prices.
The middle men who buy rough diamonds have also been suffering due to liquidity problems as one of the major banks which specialised in financing their purchases pulled out. But Dippenaar said the US – the biggest retail market for diamonds – was ‘ticking along nicely’ and there has also been strong growth in India, with diamond prices now ‘stable’.
Petra’s production rose 2pc to 3.2m carats in the year to the end of June and Dippenaar said that it was on track to produce 5m carats by 2019.
Shares brightened 4.4p to 146.2p as investors gave it the benefit of the doubt that it should be able to source larger stones from its new Cullinan plant in South Africa.
There was more drama for the online betting firms.
Gambling firm GVC Holdings (down 8p to 420.5p) is back in the battle for rival Bwin.Party Digital Entertainment (up 3.1p to 111.7p).
Bwin earlier this month accepted a £900m offer from online casino and poker firm 888 Holdings (down 2.75p to 172.25p) after turning down a £908m bid from GVC and Canada’s Amaya.
Now GVC is back with a new partner – it plans to finance the deal through a combination of new GVC shares and a £285m loan from private equity firm Cerberus Capital Management. Amaya has been ditched.
A board shake-up at AIM-listed online fashion business MySale got the approval from shareholders and its investors Sir Philip Green and Mike Ashley.
Retail veteran Iain McDonald will be joining as non-executive chairman and has been given options over 3m shares. He is a partner at the William Currie Group, which has invested in online firms including Asos and The Hut Group.
MySale Group, which issued a profit warning last year, said revenues for the year to June 30 will be 5pc ahead of the previous year at £110.4m and shares advanced 4.25p to 44.25p yesterday.
Imperial Innovations, a pick of fund manager Neil Woodford, has spent £3m buying more of technology specialist Concirrus. It has raised its stake to 28.6pc. Imperial, which backs ideas that are spun-out of the laboratories of top British universities, said the cash it has invested will be spent on Concirrus’ plan to expand into the vehicle insurance market and fund expansion of its sales team. Imperial’s shares climbed 3p to 473p.
Long-suffering shareholders in oil explorer Afren continue to be puzzled, and angry, after it postponed its general meeting on Friday indefinitely. The shares were suspended earlier this month at 1.78p having lost 99pc of their value. Bond holders are currently considering whether to provide further funding after it emerged it is now suffering serious production problems. Analysts at Panmure Gordon said: ‘Afren is teetering on the brink.’ THE supermarket price war has not dented sales of upmarket fizzy drinks firm Fevertree. The group reported a 62pc revenue rise to £24.1m in the first half boosted by sales in supermarkets. Its pretax profit jumped from £1.13m to £6.59m. It has signed up to sell its drinks in Morrisons and said the trend for cocktail Moscow Mule helped grow sales for its ginger beer in the US. It will pay an interim dividend of 0.78p a share. Shares fizzed up 3.5p to 369.5p.