UK shares take another battering in early trade on Wednesday with the benchmark FTSE 100 index plunging back below the 6,000 mark before staging the most modest of rallies. The FTSE 100 had rebounded on Tuesday after 10 days of declines as the People’s Bank of China cut interest rates for the fifth time since November. But the effect was limited.
In the US overnight, the Dow opened ahead but ended up losing all of its gains and more, eventually closing down 205 points, or 1.3%, at 15,666, although the tech-heavy Nasdaq capped its own deficit to 20 points, or 0.45%, to finish at 4,506. The overnight performance on emerging markets exchanges was a mixed bag as Australia and Japan gained while China and Hong Kong stocks retreated.
Continuing commodity weakness sees miners resume their familiar place at the bottom of the FTSE 100 leaderboard after yesterday’s relief rally. Chilean copper miner Antofagasta (ANTO), diamond producer Anglo American (AAL) and silver specialist Fresnillo (FRES) are all down between 2% and 3%.
Tool rental firm HSS Hire (HSS) is a notable loser on the All-Share, shedding 33% to 87p. Demand in HSS’s core repair, maintenance and improvement markets is ‘slower and more erratic’ than expected, prompting the company to admit in interim results that it will miss earnings expectations this year.
On a more positive note, internet betting exchange Betfair (BET) soars 18% to £30.71 after reaching an agreement to merge with Irish bookmaker Paddy Power (PAP), which is also trading 18% higher at 92.5p. The deal will create one of the world's biggest online betting and gaming companies with revenues of more than £1.1 billion. Betfair's chief executive Breon Corcoran will run the company, which will look at expanding in Europe, the US and Australia.
A trading update from Betfair shows revenue rose 15% to £135.4 million in the three months to 31 July despite the comparative period containing the World Cup.
Paddy Power's interim results reveal a 17% rise in pre-tax profit to €80.5 million with net revenue 25% higher to €527.8 million in the six months to 30 June.
App stores operating minnow Mobile Streams (MOS:AIM) plunges as the company's investment outside of its core Latin American market forces another profits warning. EBITDA will all but be wiped out as the company, now worth barely £1.5 million, chases new market opportunities in Nigeria and India.
Indonesian plantations play R.E.A. Holdings (RE.) reverses 7.2% to 260p on a slump in interim sales and pre-tax profits, caused by the lower crude palm oil (CPO) price and lower cropping.
Elsewhere, amid the sea of red advertising giant WPP (WPP) is down a modest 0.7% at £13.52 as interims reveal a better than expected performance from the US - cancelled out by a weak contribution from emerging markets.
Profit taking at social care provider Cambian (CMBN) sends the shares 3.4% lower to 253.2p after it made a £10 million pre-tax profit in the six months to the end of June, reversing its £11.8 million loss a year earlier. Development losses were higher than expected in the first half at £2.1 million.
Retail lender OneSavings Bank (OSB) rises 4.3% to 331.7p as pre-tax profits improve 60% to £47.6 million in the six months to the end of June. This was the result of higher margins, falling costs and a 17% hike in lending to £4.6 billion.
Drug developer Skyepharma (SKP) advances 4.7% to 280p on an upbeat outlook of ‘substantial’ revenue growth and a potential £7.1 million milestone payment in the second half of the year.
Greetings cards-to-creative play products designer International Greetings (IGR:AIM) gains 0.5p at 135p on a positive first quarter trading statement, flagging expansion with discounter Aldi into the US market as well as new licensing deals.
