MARKET REPORT: Trade-war fears, commodities concerns and rising oil prices prompts sell-off


A combination of trade-war fears, commodities concerns and rising oil prices prompted a sell-off approaching February’s plunge.

The FTSE 100 dropped 2.2 per cent, or 172.43 points, to 7,509.84, as only three firms closed with their share price in positive territory.

Cruise company Carnival hit the rocks to end the day as the biggest faller.

The group closed the day down 11.1 per cent, or 528p, at 4215p, as it was forced to cut its forecasts because of a stronger dollar and the rising price of oil.

Micro Focus International had spent much of the day wallowing at the bottom of the FTSE 100 fallers list.

The software and IT firm shed 5.2 per cent, or 71p, to end the day at 1293p as Donald Trump turned the focus of his trade-war spat with China to the technology sector.

Miners including Glencore, Anglo American and BHP Billiton also lost a little of their shine, ending the day down 4.7 per cent, 4.5 per cent and 3.8 per cent respectively after research firm Intellisys said basic miners were, in general, ‘over-valued’.

Analysts at Accendo Markets added that ‘weaker commodities were providing a hindrance to FTSE energy and mining names’.

Outside the list of the UK’s biggest companies, a few more firms managed to make gains.

Shareholder activism at Premier Foods came as the icing on the cake for investors in the company, which makes Mr Kipling snacks, Ambrosia custard and Bisto gravy.

Its shares climbed 3.8 per cent, or 1.4p, to 38.55p, correcting from a drop last week when news of the activist approach emerged, as shareholders prepared for improvements to be made. For the Angel Delight-manufacturer itself, the shake-up that has been demanded by Hong Kong-based activist investor Oasis Management posed more of a sticky situation.

Oasis, which has previously targeted Nintendo, announced on Sunday that it had lost faith in Premier Foods’s chief executive Gavin Darby, who it alleges has driven the business into a ‘zombie-like state’.

‘Gavin Darby has overseen five years of failure which has led to considerable destruction of shareholder value,’ said an Oasis spokesman.

Premier’s board has readied itself for a fight, however, saying it had ‘complete and unanimous confidence’ in Darby. Investor advisory firm Pirc also supported the re-election of the boss.

Turnaround advisers Alvarez & Marsal yesterday, coincidentally, released its annual report on investor activism – where shareholders take stakes in companies in order to push for change.

Their analysis of businesses across Europe showed that the UK remained the most attractive country for activist investors in the region, and that consumer-focused companies such as Premier Foods were increasingly being put in the cross hairs.

Despite the trials of being a listed company, Quilter – the wealth management arm which has spun out of Anglo-South African investment house Old Mutual – took its chances on the public markets.

Its shares shot up 4.8 per cent, or 7p, to 152p on its first day of trading yesterday, giving it a total market value of £2.89bn.

Life insurance firm Phoenix Group traded down yesterday, even as it got the go-ahead from shareholders to complete its acquisition of Standard Life Aberdeen’s insurance business.

The news that Standard Life bosses Barry O’Dwyer and Campbell Fleming would be joining the board came as little surprise.

Phoenix Group’s shares sank 3 per cent, or 23.5p, to 758p.


Source link