London shares tumble lower in early deals on Tuesday as falls among big-ticket resources and financials outweigh a few slim gains among retail and leisure issues. This after a mixed turn on Wall Street overnight and softer Asian markets this morning. Europe is moderately lower.
The FTSE 100 index slumps nearly 90 points, or about 1.5%, to 5,970, with small cpas similraly lower, although midcaps do less poorly.
Supermarket J Sainsbury (SBRY) and oil giant BP (BP.) vie for top billing on the corporate news front. The supermarket heads the blue-chip leader board, up 3.2% to 252.5p as it agrees terms over a £1.3 billion takeover of Argos-owner Home Retail (HOME), down 1.6p to 151.3p following yesterday's sharp spike.
The deal includes a capital return dependent on the sale of Homebase to Australia's Wesfarmers (WES:AX). Britain's second largest supermarket is keen to create a combined food and non-food retailer to battle US online retail colossus Amazon (AMZN:NDQ) and the teutonic discounting pair of Lidl and Aldi. Sainsbury has upped its original £1 billion offer pitched in November, whch was soundly rejected by Home Retail.
The other big news story today surrounds bombed out oil prices, restructuring costs and write-downs at BP which spins the group in to the red. The group reports its worst annual loss in two decades of $6.5 billion, with underlying profits for the fourth quarter well below forecasts for $730 million at just $196 million. Despite maintaining the fourth quarter dividend at $0.10 the shares slump 7% to 341p in response to the results, heading the blue-chip loser board.
BP’s downbeat numbers and renewed weakness in oil prices put pressure on oil stocks across the board, with Royal Dutch Shell (RDSB) down 2.8% to £14.58, Premier Oil (PMO) falling 6.3% to 33.75p and Tullow Oil (TLW) sliding 5.4% to 161.9p.
Several miners follow Rio Tinto (RIO), off 2.3% to 1657p. BHP Billiton (BLT) falls 3.8% to 652p as Standard & Poor's cut its credit ratings from A+ to A.
Calls and broadband supplier TalkTalk (TALK) reveals the extent of its cyber-attack injuries on Tuesday, showing a serious drop in customer numbers in its third quarter trading update. The company lost more than 101,000 in the three months to 31 December with TalkTalk estimating 95,000 of them were due to the attack. But the shares jump more than 7% to 234.1p as investors are relieved things were not far worse, ad take some confidence in the group's EBITDA guidance for full year 2017 of £320 million to £360 million.
Paddy Power's merger with Betfair has also completed. The name of the company has been changed to Paddy Power Betfair (PPB) with the shares priced at £105.12 each.
Online gambling company GVC (GVC) soars 8.8% to 508p after it moves from AIM to the Main Market in conjunction with its acquisition of Bwin.Party, which completed on 1 February. Bwin's stock market listing has been cancelled.
Online supermarket Ocado (OCDO) gains 8.2% at 284.9p as final results reveal encouraging 14.7% retail sales growth to £1.116 billion and a 65.3% pre-tax profit improvement to £11.9 million. The rumoured bid target also excites with news its Ocado Smart Platform solution for overseas partners is 'proving to be of great interest to a significant number of retailers' and CEO Tim Steiner expects to sign 'multiple deals in multiple territories in the medium term'.
Unloved home shopping-to-education supplies company Findel (FDL) firms 4.9% to 201p after finally completing the sale of loss-making sports retailer Kitbag for a better-than-expected £11.55 million. The buyer is US licensed sports merchandise specialist Fanatics, while the deal strengthens Findel's balance sheet and enables it to focus on its core home shopping and education businesses.
Emerging markets-focused asset managers take a tumble after a choppy trading session in Asia overnight. Aberdeen Asset Management (ADN) is one of the bigger fallers, down 1.6% at 241p and Schroders (SDR) dips 1.5% to £20.13.
Precision engineering and building products specialist Alumasc (ALU) adds 1% to 192.5p after the £68.6 million cap's half year results show the group's order book growing 42% to £27.4 million even though revenue in the six months to the end of December slipped 4% to £43.5 million.
Flooring and geo-fabrics specialist Low & Bonar (LWB) surges 8% to 64.8p after full year results show profit before tax up 12.2% at £26.6 million.
Pharmaceutical services provider UDG Healthcare (UDG) advances 2.7% to 560p as trading in the three months to 31 December is ahead of the same period a year earlier. The outlook for the year to 30 September 2016 is upbeat thanks to demand for its US and European operations.
Animal health, sustainability and publishing company Benchmark (BMK:AIM) falls 2.9% to 67p on losses for the year to 30 September 2015 jumping to £11.4 million from £1.4 million in 2014. Higher R&D spend and generic competition have been blamed.
