UK markets could be in for a fraught day’s trading action on Wednesday as investors mull over the implication of a big overnight sell-off in New York.

US shares saw some hefty falls as uncertainties creep in over President Trump's trade pact with China and worries gain traction over the strength of the US economy. The Dow Jones Industrial Average and the S&P 500 both fell by more than 3% in Tuesday’s session, with bond markets starting to cause alarm about the potential for a recession to emerge in the economy stateside.

The early signs are not great in the UK, with the FTSE 100 index slumping more than 80 points in early deals, plunging the blue-chip index back below the 7,000 mark at 6,940.56.

That sums up the sea of red across all UK indices, with mid caps, small caps and AIM stocks all coming under selling pressure early doors.

US ARM UP FOR SALE AT STAGECOACH

In corporate news, transport group Stagecoach (SGC) is looking to flog its US business as it continues to struggle to make the division work.

‘We are reviewing strategic options for the North America Division and while that includes ongoing discussions regarding a possible sale of all or part of the business, there is no certainty of a sale at this time,’ Stagecoach told investors on Wednesday.

That news comes alongside a hefty £22.6m pre-tax loss for the half year to 27 October, driven by a huge £85.4m write-down of its US coach business. That compares with a £96.7m profit this time last year, so it’s little wonder investors welcome the US sale news, sparking an 8% jump in the share price to 166.1p, valuing the business at around £950m.

The long-winded sale of UK pharma firm Shire (SHP) is finally closing on completion after proposed buyer, Japan’s Takeda, won shareholder approval for the £46bn cash and shares acquisition.

Shire sees its shares rise close on 3% to £46.77.

OVERSEAS SALES GIVE ENERGY TO JOULES

UK clothing and homeware brand Joules (JOUL:AIM) is to speed-up plans for a European distribution hub as part of its preparations in the events of a no-deal Brexit. Joules, which sells through its own stores and online, is also ordering products early and ramping up its currency hedging activities in anticipation of volatility in the pound as Brexit day approaches.

But it is international sales which are driving the fastest growth for the business, which helps the company drive a 17.6% increase in first half revenue to £113.1m, a trading update told investors.

There is no profit detail but overseas revenues now account for 16% of the total, versus 11.3% a year ago. Shares in Joules soar 9% to 226p, valuing the retail business at just shy of £200m, a welcome bit of good news for the UK retail space.

Budget airline Ryanair (RYA) is at the centre of an emerging legal wrangle with the Civil Aviation Authority which is taking enforcement action over its refusal to compensate thousands of UK-based customers.

This dispute follows the cancellation or delay of flights over the summer because of strikes by Ryanair pilots and cabin crew. But so far investors are shrugging off the news, Ryanair shares nudging €0.35 higher in early deals to €11.47.

Embattled cakes shops-owner Patisserie (CAKE:AIM), which nearly went to the wall after accounting irregularities were uncovered, has appointed an interim finance chief to help turn the business round. Nick Perrin will crunch the numbers as chief financial officer for the time being.

The company had to be rescued by entrepreneur Luke Johnson, who owns 37% of the company. Shares in Patisserie remain flat at 429.5p, putting its market cap at £581m.


Issue Date: 05 Dec 2018