Wall Street is on its longest losing streak since Donald Trump’s election after resurfacing rate rise fears sparked a stocks rout on global markets. The S&P 500 slipped back into the red for a fifth straight day as a global stocks sell-off that spilled over from the end of last week intensified. The US producer price index – a key inflation indicator which tracks wholesale prices before they reach consumers – climbed for the first time in three months, stoking jitters over building inflationary pressures in the States. Investors fear that rising prices will force the Federal Reserve to keep up the brisk pace of interest rate rises well into next year. The FTSE 100 plunged to a fresh six-month low as concerns over higher borrowing costs and global growth combined to fuel the bloodbath. The Dow Jones tumbled as much as 1.6% in intraday trading while the DAX in Frankfurt closed 2.2% lower, its worst day in just under four months.
Patisserie Valerie has plunged into crisis after the taxman filed court proceedings to wind-up the popular coffee chain. Investors were left shocked after the Aim-quoted company announced a “potential material mis-statement” on Wednesday and suspended trading in its shares. Patisserie Holdings (CAKE) cash position had been “significantly impacted”, the company said, and suspended chief financial officer Chris Marsh. Serial entrepreneur Luke Johnson, the company’s executive chairman and largest shareholder with a 37% stake, admitted to “deep concern” about accounting irregularities
BP (BP.) chief executive Bob Dudley has branded fears that the oil industry’s $1 trillion investments in oil and gas could be left stranded by a shift to low-carbon energy as misguided. The oil boss said campaigners calling for financial institutions to divest from oil and gas companies to avoid so-called ‘stranded assets’ are underestimating the flexibility of oil companies. The largest majors invest a total of $100bn in new fossil fuel projects every year, but could still adapt to a low-carbon world “in time” by reshaping their businesses “within a decade” and remaining financially resilient, he said.
Marston’s (MARS) has shrugged off Brexit as “not a big issue”. The boss of the Wolverhampton-based company said it had identified “supply chain alternatives” to mitigate potential import blockages caused by Britain’s exit from the EU. Speaking as Marston’s posted a “strong year” of trading, chief executive Ralph Findlay was optimistic of successfully navigating any fall-out. “The majority of our concerns will come down to imports and how they are handled,” he told The Daily Telegraph. “For most categories we have got pretty good supply chain alternatives. If you take wine… there are new world wines that are just as good and in many cases provide cheaper options. “We import food and drink from Europe. But the key point is that there are identified alternative suppliers that we can use.”
The competition watchdog has given the green light to an energy supply merger that will shrink the Big Six companies down to five. The Competition and Markets Authority (CMA) said the combination of SSE’s supply arm with Npower would not dampen competition in the energy market. However, political worries persist because many people remain on standard variable tariffs (SVTs), which are typically higher in price than fixed deals. The CMA concluded that SSE (SSE) and Npower “do not pay special attention to each other” when it comes to setting the price of their standard deals, and do not compete directly with each other for customers.
The nightclub company Deltic has said it was “disappointed” that details of talks with Revolution Bars Group (RBG) were leaked, after the latter walked away from a potential acquisition deal. In a statement, Deltic said it “still believes that there is a compelling financial case for a merger between the two companies, but respects the decision of the Board of Revolution.” Earlier, Revolution had rejected buying Deltic, saying it “would not be in the best interest of shareholders.” This is the second time that the city-centre pub chain has said no to a merger with Deltic.
Royal Dutch Shell ‘B’ (RDSB) has returned to the North Sea with its fourth investment this year to develop a gas field 149 miles east of Aberdeen. The Anglo-Dutch energy giant sold off around £2.4bn worth of North Sea fields and assets in early 2017, but is making a series of careful new investments in the basin where it has operated for 50 years.
Devon-based tungsten miner Wolf Minerals Limited (WLFE) has fallen into administration after failing to secure a funding lifeline, putting 200 jobs at risk. Wolf operates the open-pit Drakelands Mine near Plymouth, which was hailed as the first new metals mine in the UK for 40 years when it commenced production in 2015. It had previously been mined during the world wars to make munitions.
The luxury goods sector led the sell-off in Europe after LVMH confirmed that Chinese customs officials are tightening border checks. Trench coat maker Burberry Group (BRBY) suffered its biggest plunge in 10 months after its rival confirmed speculation of a crackdown on tourists bringing back unauthorised luxury goods from overseas. China’s efforts to repatriate consumer spending added to fears of slowing demand in the crucial market for the sector, knocking Burberry 152p to £17.28, a 9.1% fall.
Dixons Carphone (DC.) bucked the stocks slide after HSBC told clients that the electronics retailer is on the “road to redemption” ahead of an expected strategy reboot in December. Analyst Andrew Porteous argued in an upgrade to “buy” that Dixons must make its troubled Carphone Warehouse model “work or exit”. He also praised management’s long-term incentive plans switching their focus to cash generation. Dixons rallied away from a 10-month low, climbing 5.8p to 159.3p.
Paper and packaging giants Mondi (MNDI), Smith (DS) (SMDS) and Smurfit Kappa Group (SKG) slumped for a second day after Chinese rival Nine Dragons outlined plans to enter the US market. The firm revealed that it will invest $300m (£227m) in two mills in the States. Mondi slipped back for a seventh straight day, plunging 170p to £17.76, while DS Smith and Smurfit tumbled 29p to 418.2p and 156p to £25.80, respectively.
Sage Group (SGE) clawed back 9.6p to 556.2p after analysts at Deutsche Bank warned that the software giant’s woes could have piqued the interest of private equity firms or an activist investor.
Urals Energy Public Co Ltd. (DI) (UEN) plummeted 23.5p to 51.5p after becoming aware of an “unauthorised loan” of around $1.5m that has “significantly constrained” its day-to-day funding needs.
London-focused property developer Telford Homes (TEF) saw its shares nosedive on Wednesday after it warned that mounting “negative commentary” around Brexit had led to a slump in demand for homes in the capital. Jon Di Stefano, chief executive, said while the Aim-listed company’s long-term plans were on track, “in the meantime we’ve got a period of time where there’s a lot more uncertainty and less transactions actually taking place while everybody tries to figure out what Brexit actually means for them”.
Recruitment giant has raised its profit forecasts for the year despite a slowdown in senior workers switching jobs that held back its UK arm. Steve Ingham, chief executive, said uncertainty over Britain’s future relationship with the European Union was the culprit behind a 4pc drop in gross profit at Michael Page, which fills specialist jobs for clients including WHSmith, G4S and central Government.
