UK shares come under selling pressure in early trade on Wednesday following a bleak overnight session in the US. Wall Street suffered its worst trading day this year as investor concerns about whether President Donald Trump will be able to deliver promised tax cuts weigh on confidence.
That dragged both the Dow Jones and S&P 500 lower with banks, which have helped to propel share markets to record highs recently, chief among the casualties.
The UK’s benchmark FTSE 100 follows the US lead, sliding around 50 points, or roughly 0.7%, lower to 7,327, with mid cap and smaller company indices also on the skids.
Home improvement retailer Kingfisher (KGF) heads the Footsie loser board on Wednesday, off more than 3% at 334.7p, despite beating forecasts with an 8.3% rise in annual profit. But doubts are increasing about how resilient sales in Britain can last, with the minds of investors also worried by a softer French market, about which the group remains cautious. Chairman Daniel Bernard has also announced plans to retire next month.
International estate agent Savills (SVS) reports a 12% rise in underlying profit for 2016 as demand for property in Britain held up in the face of Brexit-induced worries. But the subsequent slump in the pound appears to be bolstering investor interest, particularly in the buy-to-let space. The shares nudge around 1% lower to 876p.
Going the other way, Kenmare Resources (KMR), one of the leading global producers of titanium minerals and zircon, has announced an 88% reduction in debt and a return to profit after record output in 2016, which it expects to beat in 2017. That inspires a 3.5% share price rally to 330p, valuing the business at a little more than £360m.
Oil prices dip on Wednesday as rising crude stocks in the United States underscore an ongoing global fuel supply overhang despite an OPEC-led effort to cut output.
Back in the retail space, Shoe Zone (SHOE) is among the final bidders for rival footwear chain Brantano, according to reports late on Tuesday. But investors are not counting any chickens just yet, the stock staying unchanged at 117.5p in Wednesday trading.
Among smaller companies, Britain's IGas (IGAS:AIM) has won planning consent from Nottinghamshire County Council to develop a shale gas well site and drill an exploratory well at Tinker Lane. The announcement sees the shares nudge 2.7% higher to 4.75p, valuing the business at about £20m.
Canadian gold miner Endeavour Mining has called off merger talks with UK-listed Acacia Mining (ACA:AIM), sparking an 8% share price sell-off in the latter’s share price, to 469p.
The future is becoming a bit harder to predict for Cambridge-based digital printing technology designer Xaar (XAR), worrying some investors. Results for the 2016 full year show profits slightly down on revenues marginally up but comments about an untypically second half weighted 2017 are cause for concern, the shares slumping 8.5% to 330p.
Delays to the start of big construction projects puts Van Elle (VANL:AIM) under the cosh, the stock tanking 21% to 90p. This will squeeze operating margins despite management’s otherwise optimistic forward view.
