Heavy selling on Asian markets and escalating trade tensions lead to second day straight of large losses across UK stock markets in early trade on Monday. Just mining group Fresnillo (FRES) and British Airways-owner International Consolidated Airlines (IAG) make positive moves across the whole FTSE 100, which slumps more than 100 points, or 1.35%, to 7,307.00.
Leading the sell-off is grocery technology firm Ocado (OCDO) after completing the planned £750m sale of its delivery business to Marks & Spencer (MKS), first announced in February.
The company said it had consequently appointed current M&S strategy director Melanie Smith as chief executive of Ocado Retail.
Investors have their concerns over the deal, sending shares in Ocado tumbling more than 4% to £11.58, topping the FTSE 100 loser board in early trade.
Also dragging are shares in banking group HSBC (HSBA) following a top management shake-up and $1bn share buyback plan announced alongside interim results.
HBSC said chief executive John Flint had stepped down after just a year and a half in the top job, news that has spooked investors, especially given the bank’s warning that that falling interest rates in the US and geopolitical uncertainty would hurt growth.
HSBC reported a 15.8% increase in pre-tax profits for the six months to 30 June to $12.4bn as revenue rose 7.6%.
FOOD DELIVERY DEAL AGREED
Food delivery companies Just Eat (JE.) and Takeaway.com have agreed terms of an £8.3bn merger first outlined on 29 July.
The deal will see Just Eat shareholders receiving 0.09744 new Takeaway.com shares for each of their Just Eat stock valuing the UK online app business at 731p per share. Just Eat shareholders will own approximately 52.2% of the combined company’s share capital.
Just Eat shares nudge 2% lower to 720.2p, which suggests that investors do not hold out much hope that a rival buyer will emerge for the company. Speculation has suggested that US online giant Amazon could be a potential suitor, although it has yet to make any official move.
Advertising business WPP (WPP) has merged a number of its business units to simplify the company. Units operating under the public relations, public affairs, brand consulting, health and wellness and specialist communications have all been wrapped up under a new Advertising & Media banner.
The businesses included Wunderman, VML, Ogilvy PR and OgilvyOne. WPP said its US healthcare companies had also been re-aligned with agency partners within AMIM, and Burson Marsteller and Cohn & Wolfe merged to form Burson Cohn & Wolfe.
‘A key element of our strategy is to align our technology capabilities more closely with our creative expertise, and to simplify WPP through the creation of fewer, stronger, integrated agencies,’' the company said.
But WPP shares remain on the back foot, down 2% on Monday at 915.2p.
UPBEAT DIABETES UPDATE FOR ASTRAZENECA
Drugs developer AstraZeneca (AZN) said the European Commission had approved an update to the marketing authorisation for the company's type-2 diabetes drug to include positive results from a Phase III drug trial.
That apparently upbeat update fails to prevent Astra shares being dragged lower by the widespread investment mood, falling 53p to £71.87.
Freight business BBA Aviation (BBA) saw its shares fall 3.5% to 303.8p after the company reported a 2% decline in half year pre-tax profits.
For the six months to 30 June underlying pre-tax profits fell 2% to $140.2m as revenues rose 19% to $1.53bn, bolstered by organic growth along with the acquisitions of EPIC, Firstmark and Ontic licences acquired during 2018, the company said.
Wealth manager Quilter (QLT) fell 0.7% to 139.05p as it agreed to sell its life insurance and pensions division to ReAssure for £425m, while also reporting a first half loss.
EasyHotel (EZH:AIM) leapt 34% to 94.33p on news that it had agreed to be acquired by Canadian real-estate fund Cadim Fonds and Luxembourg’s ICAMAP Investments for £138.7m, or 95p per share.
Oil explorer Petro Matad (MATD:AIM) fell 12% to 6.95p as it revealed that it had postponed the drilling of a well in Mongolia, after a provincial government challenged its land-use rights
