UK shares were decimated on Friday as panic selling swept the market on Black Friday leaving investors facing an equities sea of red.

The benchmark FTSE 100 finished the day 266 points lower, or 3.6% down, at 7,044.03, with the state of mid-caps barely any better. The FTSE 250 lost nearly 750 point, or 3.2% as it closed at 22,573.89.

Sharp falls in anything travel or leisure related bore the brunt of the selling although commodity, energy and bank stocks were also shunned. This follows news of new travel and UK border restrictions from half a dozen nations in southern Africa following the discovery of a new strain of the Covid infection.

The new rules have seen the UK temporarily ban inbound flights from South Africa, Namibia, Zimbabwe, Botswana, Lesotho and Eswatini from midday on Friday, while Brits and Irish residents arriving from those six countries after 04:00 on Sunday will have to quarantine in a hotel, with those returning before that being asked to isolate at home.

European markets also fell sharply, following the steep sell-off across Asia. The Euro Stoxx 50 ended 4.7% off at 4,090.44. The ugly mood extended to Wall Street after yesterday’s Thanksgiving close with the Dow Jones down 2.9% at the UK close, while the S&P 500 dropped 2.3% and the tech-fuelled Nasdaq Composite falling 2%.

Bitcoin has plunged to a six-week low $54,434 while oil slumped nearly 11%, with Brent crude losing almost $9 a barrel to $73.30.

AIRLINES STOCKS CRASH

Topping the FTSE 100 loser board at lunchtime is British Airways-owner International Consolidated Airlines (IAG), down 15% at 131.4p, followed by aero-engineer Rolls-Royce (RR.), showing an 11% decline at 122.2p.

More of a drag on the index came from steep falls in Royal Dutch Shell (RDSB)  and BP (BP.), down 6% and 7.5% respectively in reaction to oil price falls.

The mid-cap FTSE 250’s biggest losers today are chock full of travel-related plays, ranging from cruises operator Carnival (CCL), holidays firm TUI (TUI) and budget flyer EasyJet (EZJ) to airport concessions owners  SSP (SSP) and WH Smith (SMWH) all took a battering.

Retailers were also on the back foot, with panic surrounding the new variant likely to deter people from visiting physical stores to snap up Black Friday deals.

SITTING UNCOMFORTABLY

Sofas-to-carpets seller ScS (SCS) dropped 8% to 230p after  reporting a reduction in store footfall and conversion over the past seven weeks with consumers spending less on big ticket items.

ScS attributed this to a change in behaviour, ‘with consumers shopping earlier for Christmas when compared with previous years’. The Sunderland-based sofas seller also warned extended product lead times across the furniture and wider retail industry are also ‘having an impact on current purchasing trends’.

SCS reported a 10.6% like-for-like sales fall year-on-year for the 16 weeks ending 20 November following an ‘unprecedented period of pent-up demand at the beginning of the prior year’, although like-for-likes were up 0.9% on a two year basis.

Family-controlled car dealer Caffyns (CFYN) saw earlier sharp gains wiped out to show falls of 6% at 471.5p despite resuming its dividend off the back of a jump in first half profit as the lifting of pandemic restrictions boosted performance.

‘The company’s forward-order bank for new cars is at a historically high level, which is especially encouraging for 2022 when it is hoped that new car availability will improve’, said Caffyns.

However, it also warned that in the short-term, ‘new cars are expected to remain in short supply and the high level of national Covid-19 infections continues to be a concern as winter approaches. Given these uncertainties, the board remains cautious for the second half of the financial year.’

Robotic process automation company Blue Prism (PRSM:AIM) rallied 7% to £12.98 after it recommended an increased, final takeover offer from Vista priced at £12.50, news that emerged after yesterday’s market close.

A finished above the take-out price suggests that investors believe higher bids could still emerge.

AROUND THE MARKET

Elsewhere, Essentra (ESNT) softened a little more than 1% to 309p as it kickstarted a strategic review of its packaging division that will run in parallel with the previously announced strategic review of its filters business as part of a move to become a pure play components business.

Essentra expects that both reviews are likely to conclude in Q2 2022 at the earliest and also announced that finance director Lily Liu will be leaving the company to take up a new role at Synthomer (SYNT).

Energy group Parkmead (PMG:AIM) plunged 12.8% lower to 41p as the company reported wider losses owing to a £10.9 million write-down of assets related to the relinquishment of licences in the UK North Sea.

Gasification solutions minnow Eqtech (EQT:AIM) was marked up 7.6% to 1.43p after inking a collaboration agreement with consulting and engineering firm Wood to jointly target opportunities to develop waste-to-synthetic natural gas and waste-to-hydrogen solutions.

‘This collaboration agreement with Wood is an important start to our entry into these growth markets,’ insisted Eqtech.

‘Wood’s teams are among the very best at what they do, and we are excited to have the opportunity to work shoulder-to-shoulder with them to bring our waste-to-syngas capabilities to new solutions in more geographies.’

And Northern Bear (NTBR:AIM) nudged 1.7% higher to 59.5p as the company swung to a first half profit as higher gross margins bolstered performance.

For the six months to 30 September 2021, pre-tax profit was £1.4 million compared with a loss of £2.4 million last year as revenue increased to £30 million from £20.1 million.

Looking ahead, the company said it had ‘positive’ outlook for the second half of the financial year.

‘Our forward order book remains strong and should support our trading performance in the coming months, subject to the ongoing supply chain and staffing challenges noted above and the uncertainty over the long-term outlook for the COVID-19 pandemic,’ the company said.

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Issue Date: 26 Nov 2021