UK investors batten down the hatches in early trade on Tuesday as the bloodbath on global stock markets continues. Asian markets plunged overnight taking the lead of the Dow Jones which registered its largest points fall in history.
UK investors are rightly rattled as they ponder whether this is simply a correction after a prolonged run for share prices, or if there is something far more worrying at its root.
FTSE 100 PLUNGES
Early trades see the FTSE 100 index plunge more than 200 points, or close to 3%, to 7,116.66 as investors rush to sell assets regardless of corporate announcements.
The mass equities exodus is widespread across UK markets, with mid-sized companies and small caps coming under the cosh just as their blue-chip cousins are. The FTSE 250 index slumps more than 500 points, while the small cap index declines by 115 points.
US EXPOSURE LEAD BIGGEST FALLERS
Top fallers among FTSE 100 stock include investment trust Scottish Mortgage (SMT), which is heavily exposed to US equity markets, plus healthcare operators NMC Health (NMC) and Mediclinic International (MDC), which also have substantial North American operations.
Gold miner Randgold Resources (RRS) is the sole FTSE 100 stock to rise, no doubt a response to investors safety-first appetite for the perceived safe-haven of gold in the panic.
MIDCAPS ALSO HIT HARD
Among the biggest mid cap faller are publishing group Bloomsbury Publishing (BMY) and bus and trains operator Stagecoach (SGC), both off around 12% on Tuesday.
Stagecoach may still be feeling the effects of having its East Coast rail franchise ended early on Monday, the group admitting that it got its operating economics completely wrong.
In the corporate news that is around, engineering outsourcer Babcock (BAB) cuts its revenue forecast for the 2018 full year to between £5.3bn to £5.4bn, blaming a tough British business environment.
That sees the share price slump nearly 5% in early deals to 621.2p. The stock had traded at close to £10.00 levels last summer.
But the company is sticking to its guns on profits, which imply pre-tax profit for the 12 months to 31 March 2018 of £513.2m, according to consensus data from Reuters.
OCADO MISSES WITH FLAT EARNINGS
The marmite-like affair between investors and UK groceries delivery group Ocado (OCDO) goes on as the company misses forecasts with flat full year core earnings. There are also plans to raise around £140m of fresh growth funding.
Ocado also says its performance for the current year 2018 is likely to be hamstrung by investment. That sends the stock spinning 7% lower to 457.6p, valuing the business at about £2.88bn.
Oil giant BP (BP.) on Tuesday reports a surge in fourth-quarter profit, beating analyst expectations, supported by strong earnings in refining and trading. But the stock fails to make positive ground amid the wider sell-off, its share price sliding 1.5% to 474.75p.
Gold prices rose on Tuesday as a rout in global equities prompted investors to seek shelter in safe havens, including gold.
