UK shares crash as investors sweat over interest rate rises down the line, with jobs data later today likely to provide some clues as to the timing. The benchmark FTSE 100 slumps more than 100 points, or nearly 1.6%, to 6,558, while major European indexes also hit the skids. The French CAC 40, German Dax and the Euro Stoxx 50 are all off around 3% in early trade on Wednesday.
In corporate news, publisher Pearson (PSON) falls 1.3% as it confirms the widely anticipated news that it will sell its 50% stake in The Economist for £469 million to Exor, the investment vehicle run by Italy’s Agnelli family.
Outsourcer Interserve (IRV) sheds 3.6% to 603p as it warns on the impact of increases to the minimum wage on its business. The change will shave between £10 million and £15 million from profit in 2016, chief executive Adrian Ringrose says, until contract renewals enable the firm to reprice its services.
Unilever (ULVR) sheds 4% to £27.96 on a downgrade from investment bank Goldman Sachs. Analysts at Goldman rate the consumer goods giant a ‘sell’ and lower their price target to £28.20, from £29.12. The US investment bank also reduces its rating on Reckitt Benckiser (RB.), moving from ‘buy’ to ‘neutral’.
Mid cap E&P Tullow Oil (TLW) slips 1.2% to 217.2p as the positive news that it is resuming production from its Jubilee field in Ghana is overshadowed by disappointing exploration wells in Suriname and Norway.
Pilot training tech minnow SimiGon (SIM:AIM) leaps 5% to 21.5p as it bags an additional contract from a leading provider in the small tactical Unmanned Aircraft Systems (UAS) market. SimiGon, a running Shares Play of the Week at 26p, supplies the underlying training system technology for the UAS programme.
Rail scheduling and analysis software supplier Tracsis (TRCS:AIM) jumps more than 6.5% to 469p as it confirms strong trading across the group. This means that full year results to 31 July will beat market forecasts, a big plus for the running Shares Play of the Week at 395p. Analysts at Investec were anticipating revenues of £23.6 million and pre-tax profits of £5.5 million ahead of today's news, compared to the previous year's £22.4 million and £5 million respectively.
Investors brace themselves for a cash windfall from silicon wafer recycler Pure Wafer (PUR:AIM) as it seals the disposal of its fire-damaged Swansea factory and settles outstanding obligations under Government funding. The company estimates a return of funds resulting from the Swansea insurance settlement of about 140p to 145p a share, although the underlying business still looks unbalanced. The shares jump 23% to 156.5p.
Education technology group Tribal (TRB) falls 6% to 152p as analysts reduce earnings forecasts following a challenging first-half period. The business continues to suffers from uncertainty surrounding the timing of software deployment and contract completions.
A positive trading update from ventilation specialist Volution (FAN) pleases the market, the shares rising 4.7% to 171.5p. While it says financial results are only expected to meet, rather than surpass, expectations, the stock gets a boost from positive analyst comment. Liberum raises its price target from 180p to 195p.