UK shares crash on Wednesday as as both blue chips and mid caps plumb fresh lows, stricken by diving miners and financial stocks. Crude oil prices are again on the back foot as traders factor Iran exports into an already over-supplied market. The International Energy Agency says Iran's anticipated output of 600,000 barrels a day could see the market 'drown in oversupply' of crude oil in 2016, potentially pushing depressed prices even further down.
In early trade the benchmark FTSE 100 is down 167 points, or 2.7%, to 5,710, a more than three-year nadir. The FTSE 250 index also hits the skids, slumping 340 points to 15,774, a rough 2.1% slide.
Amid wider sector weakness as oil prices resume their downward plunge, Royal Dutch Shell (RDSB) receives particularly harsh punishment. The shares are down 4.3% to £13.10 as it releases numbers early to give investors a full picture ahead of next week's vote (27 Jan) on its £36 billion merger with BG (BG.). The details are pretty ugly with Q4 profits expected to be in a range between $1.6 billion and $1.9 billion, less than half the $4.2 billion it made in the same period of 2015.
BHP Billiton (BLT) falls 6% to 589.75p after revealing a drop in production from most of its energy and metal commodities. There is no explicit comment on the dividend cut widely expected by the market but the FTSE 100 does hint at such action by saying it wants to protect the balance sheet.
JD Wetherspoon (JDW) slumps 12.5% to 590p after saying it expects 2016 earnings to be at the lower end of market forecasts. It blames higher labour costs as the National Living Wage will come into force from April. We warned this threat could hurt earnings in a recent article in Shares.
Small cap explorer Mariana Resources (MARL:AIM) jumps 10.9% to 1.77p after news that Toronto-listed Sandstorm Gold had bought royalties from Teck Resources including a 2% net smelter royalty on Mariana’s 30%-owned Hot Maden project in Turkey. A presentation from Sandstorm show seven of the 56 acquired royalties to be classes as ‘key assets’ with Hot Maden at the top of the list.
Sprue Aegis (SPRP:AIM) drops 4% to 325p after warning that 2016 earnings would be heavily weighted towards the second half of the year. Sales are also slowing down in France where it had been enjoying a boost from new laws requiring smoke alarms in every house. We look at the risks facing the stock in this exclusive news analysis.
Translation services and software business SDL (SDL) reveals the outcome of a strategic review that means selling certain non-core businesses. On trading, SDL says that pre-tax profits for calendar 2015 will be in the range of £20 million to £22 million, flat on 2014 and in line with current market estimates of £20.6 million, while revenues will be £265 million to £270 million, slightly lower than the £274 million anticipated by the market.
Stationer-to-bookseller WH Smith (SMWH) sparks up 4.5% to £16.60 as a strong Christmas trading update stokes full-year earnings upgrades. Following better-than-expected high street sales over the key five week festive period, the retailer expects annual profit growth 'to be slightly ahead of plan'. We'll look at the update in more detail on the Shares website later.
Unloved pet food and accessories seller Pets At Home (PETS) emerges from the doghouse, bid up 5.7p to 238.9p on a reassuring third quarter update and the reiteration of full-year guidance. Like-for-like sales growth of 2.2% is at the upper end of consensus and Pets At Home also pleases by reporting a recovery in health and hygiene sales in the 12 weeks to end-December.
IT and communications services supplier Synety (SNTY:AIM) rallies 3.8% to 82p as it reveals revenues in the year to 31 December rose 105% to £3.33 million, with US revenue up seven-fold to £500,000. That's marginally better than expected by the market which had been looking for £32.2 million of sales.
Sports nutrition company Science in Sport (SIS:AIM) adds 1p at 53.5p on a positive full-year trading update. CEO Stephen Moon highlights continued rapid revenue growth in 2015, notably in international markets and online, and says very strong fourth quarter trading has spilled over into 2016.