UK stocks sharply decline in early trade on Tuesday morning as import/export data from Chinese spooks investors that the squeeze on the global economy is not easing off. This after lower sessions on Wall Street and across Asia overnight as OPEC on Monday decided not to limit crude oil production.
The FTSE 100 index sags 43 points, or 0.68%, to 6,180, while main indexes across Europe are also under selling pressure, the EURO STOXX 50 off 1% at 3,316.
In corporate news, FTSE 100 miner Anglo American (AAL) says it will not pay a dividend for the second half of 2015, nor in 2016, triggering an 8.9% decline in its share price to 336.1p. The business will streamline its asset base to focus on projects capable of generating the best free cash flow.
Among the bigger movers, Challenger Acquisitions (CHAL) soars 34% to 51p after it's readmitted to trading following its reverse takeover of Starneth, which designs and engineers giant observation wheels like the London Eye. Challenger says it has a pipeline of 25 potential observation wheels, the first of which is its 2.4% equity stake in the $500 million New York Wheel Project.
Failure to make any progress with Indian gold mining prospects leads Kolar Gold (KGLD:AIM) to commence a strategic review. Cash is running out, so the small cap says it will either put itself up for sale, wind up the company or sell assets. The shares dive 27% to 0.73p.
TV and film rights business Entertainment One (ETO) falls 10.5% to 157.9p - extending yesterday's losses - after a debt refinancing leads to earnings downgrades. The sell-off sees the stock evicted from our Plays portfolio after a less than two-week stay. The company is issuing £285 million of 6.875% secured notes to replace existing debt facilities not due to expire until January 2018 with some observers suggesting it is gearing up for an acquisition.
North Sea oil producer EnQuest (ENQ) gains 5.9% to 20.38p as it signals output will increase by a third in 2016 and says operating costs will reduce to $26-$28 per barrel.
Model railway and Scalextric owner Hornby (HRN:AIM) falls 3.2% to 92p after its statutory pre-tax loss widens from £0.5 million to £4.5 million in the six months to 30 September due to supply chain disruption in two European model rail factories, the implementation of its new IT system in the UK and a reorganisation in the international business. The disruption sends sales down 7.9% to £22.3 million, but Hornby says trading since the first half has improved considerably with year-on-year growth of 9% in September.
Shares in non-life insurer Lancashire (LRE) recover 4.3% after Monday’s 11.4% collapse on reports it sacked the chief executive and finance chief of Lloyd’s platform Cathedral. An analyst at Westhouse Securities warns that if senior underwriters also depart they could take business with them.
Organ transportation device-maker Lifeline Scientific (LSIC:AIM) improves 3.2% to 190p on securing new orders in Brazil and North America that could add more than $1.5 million to annual revenues.
Carpets-to-commercial flooring distributor Headlam (HEAD) is marked down 8.75p to 510.25p as it flags a slower second half growth rate, though CEO Tony Brewer still expects the company to meet the board's full-year expectations.
Ivory Coast-based palm oil project operator DekelOil (DKL:AIM) cultivates a 2.2% gain to 1.18p after announcing a €5.1 million debt write off that 'unlocks significant value for shareholders'.
Fragrance and flavour specialist Treatt (TET) advances 2.4% to 168p after the £84.8 million cap posts a 15% increase in adjusted profit before tax in the year to the end of September.
