London equities jolt lower after torrid sessions on Wall Street and in Asia overnight provide firm directional cue. France's CAC 40 and Germany's DAX are down more than 2%. Tapering commodity prices and a dive in China's yuan remain the troubling catalysts for investor gloom. The UK benchmark FTSE 100 skids 96 points, or about 1.6%, lower to 5,865, while the midcap FTSE 250 takes an even heavier 1.8% hit to 16,396. UK small caps are also down around 1%.
WTI crude is at $30.79/bbl while Brent sits at $30.36/bbl. Gold is trading at $1,089/oz and copper is at $196/lb.
Corporate news is again dominated by supermarket Christmas trading updates, this time from Britain's number one, Tesco (TSCO). Its shares are marked up 7.4% to 170p on news of a strong Christmas on home turf as well as strengthening international sales. For the third quarter to 9 January, group like-for-like sales grew by 0.4%, Tesco's first increase for over four years. UK like-for-like sales were in positive territory over the peak six festive weeks, up 1.3% as shoppers responded to lower prices and improved customer service levels.
J Sainsbury (SBRY) bid target Home Retail (HOME) firms 3.75% to 155p despite posting a disappointing festive update. Argos struggled over Christmas and Home Retail warns full-year profit before tax will now come in around the bottom of an already-downgraded forecast range. However, this is all offset by ongoing bid excitement, only heightened by last night's confirmation Home Retail is in advanced discussions to sell DIY chain Homebase to Australia-listed conglomerate Wesfarmers for £340 million, a deal that would leave Argos as the prize up for grabs.
Shares in oil and gas producer Premier Oil (PMO) remain suspended after yesterday afternoon's announcement it had agreed to buy all of German utility E.On's UK North Sea assets in a deal worth $120 million. The transaction is being funded by its own cash resources and management say it will realise cost synergies, take advantage of tax losses and boost lending covenants.
High street star turn JD Sports Fashion's (JD.) phenomenal run continues, the shares up another 7.3% to £11.36 on news its exceptional performance continued over Christmas, triggering another round of upgrades. The sports-to-outdoor brands specialist says full-year profit before tax will beat the recently-upgraded £136 million consensus estimate by up to 10%.
Online videos play Blinkx (BLNX:AIM) flies 22% higher to 19p as it says third quarter adjusted EBITDA will be ahead of management's views, while its revenue performance was in line. Cost-cutting measures were starting to positively impact the company's path to profitability, it saysid.
3D display technology minnow DDD Group (DDD:AIM) jumps 7% to 1.88p as it is granted a new US patent that expands the scope of its international patent library to include high dynamic range video signal coding and rendering.
Frankie & Benny's owner Restaurant Group (RTN) slumps 12.5% to 558p after warning of tougher trading for consumer-facing businesses towards the end of 2015. It says it is more cautious than previously on the outlook for 2016 and is concerned about the impact of the EU referendum, national living wage and global uncertainty. Like-for-like sales rose by 1.5% in the year to 27 December.
Terry Leahy-chaired discounter B&M European Value Retail (BME) bounces 6.5% higher to 273.4p on a reassuring third quarter update. CEO Simon Arora flags a record Christmas for the multi-price value retailer, whose group sales grew 23.5% in the face of challenging trading conditions.
Also in demand is iconic British brand Burberry (BRBY), which clips ahead 17.5p to £11.30, buoyed by a better-than-expected third quarter update which provides a positive surprise given the luxury industry's challenged outlook.
Industrial machine rental specialist Lavendon (LVD) provides some cheer to the UK industrial sector, gaining 6.1% to 135p. UK rental revenue gained 1% in the fourth quarter, while the Middle East and Europe improved 10% and 7% respectively. Results for the 12 months to 31 December 2015 are expected at the top end of management expectations, says chief executive Don Kenny.
A 15% rise in the value of German residential property investor Phoenix Spree Deutschland’s (PSDL) portfolio in 2015 pushes the shares 2.5% higher to 167.5p. Rising rents, fewer vacancies and the impact of acquisitions and disposals are behind the rise. Liberum has upgraded its net asset value forecasts by 3% to €2.28 a share for the year.
