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FTSE 100 falls for ninth day in a row

Last updated: 17:40 21 Aug 2015 BST, First published: 17:41 21 Aug 2015 BST

Most followed: Banksy, Dismaland, GlaxoSmithKline, Petroceltic, PSNB, Rose Petroleum
Panic on the streets of London ... well, the dealing rooms, anyway

LONDON CLOSE

A 180 point fall for the Footsie today left the top-share index down 363 points, or 5.54%, down on the week at 6,188.

Not surprisingly after a fall of that magnitude this week, the FTSE 100 is now someway below the level at which it started the year as what former prime minister Harold Macmillan referred to as “events, dear boy” put the squeeze on stock markets.

Today, it was China and Greece causing the bulls to exit stage left, pursued by bears.

Greek PM Alexis Tsipras has stepped down and called an election in an effort to remove some of the extreme left wing members in the Syriza party, but there is no guarantee he will be re-elected.

Meanwhile, downbeat Chinese manufacturing data showed manufacturers suffered the worst August reading for the Caixin flash manufacturing PMI in six years.

Just one blue-chip in London defied the trend today – Royal Mail (LON:RMG), up 1.6% - with even haven stocks such as precious metal miners Randgold Resources (LON:RRS) and Fresnillo (LON:FRES) surrendering gains notched up in the morning.

Drugs giant GlaxoSmithKline (LON:GSK) was off 3.4% at 1,324.5p, despite trousering US$1bn with the sale of the rights to auto-immune system drug ofatumumab to Novartis.

Among the mid-caps, Spire Healthcare (LON:SPI) took a mighty tumble, down 12.8% at 350.31p, after its half-yearly report.

Adjusted underlying earnings (EBITDA) in the first half of the year rose 8% to £83.4mln and although the company declared a maiden interim dividend, investors were spooked by indications that “there may be some near-term weakness in NHS demand over the remainder of this financial year”.

The day’s biggest gainer was international assistance business CPPGroup (LON:CPP), as it returned to profitability at the half-way point of the year.

The shares shot up 43% to 11.75p.

Another small cap wanted after interim results was Photonstar LED (LON:PSL), which rose 21.2% to 5p.

The British designer and manufacturer of smart LED lighting solutions said it has been EBITDA (underlying earnings) positive since April on a monthly basis, which put a positive shine on half-year results that showed an loss before tax unchanged from a year earlier of £0.6mln.

At the opposite end of the share price performance spectrum was Techfinancials (LON:TECH), which lost a quarter of its value after a profit warning.

The software developer said underlying earnings in the first half of the year, while positive, have been affected by an increase in spending on research and development.

Another company shedding a quarter of its market value was Kodal Minerals (LON:KOD), after it published the results of its drilling campaign at the Grimelli copper and zinc project in western Norway.


WALL STREET

Traders in New York were looking at a sea of red on screens Friday as US stocks tumbled, along with other global indices.

Putting investors off were China woes and now Greece as world stocks are heading for their worst week of the year and, according to BoA Merrill Lynch, share selling has hit a 15-week high of US$8.3 billion in the past week.

The benchmark Dow Jones is down 128 points at 16,866, the Nasdaq lost 30 to 4,848, while the S&P 500 is down 14 to 2,022, with tech stocks taking a pounding again.

It comes after a 358 point slide in the Dow yesterday - the worst performance in 18 months.

In London, the FTSE 100 is down 97 points, or 1.52% at 6,271.

David Madden, at City spread betters IG, said: "China and Greece have been dominating the headlines in recent months, and now they have both taken a nasty turn at the exact same moment, leaving traders terrified as panic selling becomes widespread. Greece is staring into the political abyss and China is cooling off at an alarming rate."

In Greece, Alexis Tsipras has stepped down and called an election in an effort to remove some of the extreme left wing members in the Syriza party, but there is no guarantee he will be re-elected.

Meanwhile, downbeat Chinese manufacturing data showed manufacturers suffered the worst August reading for the Caixin flash manufacturing PMI in six years.

In corporate news, tech giant Apple (NASDAQ:AAPL) dropped 1.86%. along with Microsoft (NASDAQ:MSFT), down 1.14% while Facebook (FB) dropped 3%.

Shares in Hewlett Packard (NYSE:HPQ) fell in pre-market but were up over 3% in morning trade despite it reporting a 13% drop in third-quarter earnings and issueing current-quarter forecasts below market expectations as the world’s second-largest PC seller continues to struggle amid technology shift toward mobile and Cloud computing.

Foot Locker (NYSE:FL) shares eased 0.77% to around US$71 as the company carried the momentum through 2015, turning in a strong set of second quarter numbers, which beat expectations.

Net income in the three months to August 1 was  US$119 million, or 84 cents a share, a 29% increase on the same period last year, while total sales increased 3.3%, to US$1.7bn in the three months compared to the second quarter of 2014.

Elsewhere,  shares in Salesforce.com (NYSE:CRM), the world's biggest maker of online sales software, nudged almost 3% higher as it lifted its full year revenue guidance again, as it posted decent second quarter numbers.


MID-SESSION WRAP

London’s blue-chip stocks tumbled in the late morning to sit significantly lower as they were dealt a double blow from China and Greece.

“China and Greece have been dominating the headlines in recent months, and now they have both taken a nasty turn at the exact same moment, leaving traders terrified as panic selling becomes widespread” David Madden at spread betting firm IG said.

“Greece is staring into the political abyss and China is cooling off at an alarming rate.”

Alexis Tsipras has stepped down and called an election in an effort to remove some of the extreme left wing members in the Syriza party, but there is no guarantee he will be re-elected.

Meanwhile, downbeat Chinese manufacturing data showed manufacturers suffered the worst August reading for the Caixin flash manufacturing PMI in 6 years.

The FTSE 100 was off 94 points at 6,274, with insurance firms RSA (LON:RSA), Prudential (LON:PRU) and Old Mutual (LON:OML) prominent among the worst performing index constituents, with losses of more than 2%.

Drugs giant GlaxoSmithKline (LON:GSK) was off 1.9% at 1,345p, despite trousering US$1bn with the sale of the rights to auto-immune system drug ofatumumab to Novartis.

Among the mid-caps, Spire Healthcare (LON:SPI) takes a mighty tumble, down 13.1% at 349p, after its half-yearly report.

Adjusted underlying earnings (EBITDA) in the first half of the year rose 8% to £83.4mln and although the company declared a maiden interim dividend, investors were spooked by indications that “there may be some near-term weakness in NHS demand over the remainder of this financial year”.

The day’s biggest gainer was tiddler Marechale Capital (LON:MAC), up 248% at 6.7p, after it confirmed press speculation confirms that a meeting of the Full Planning Committee of Kettering County Council is scheduled to be held on 25 August 2015 to consider the planning application made in respect of Desborough Airfield, the proposed site of the Northfield UK Solar Limited project .

“Whilst the development control manager has recommended to the committee that the Application be approved, no decision has yet been made,” the company said.

Software Radio Technology (LON:SRT) was wanted after it won a US$5mln contract to provide a national authority with its AIS Maritime Domain Management (MDM) system.

The marine communications specialist’s shares floated 1.25p higher to 30.5p.

At the opposite end of the share price performance spectrum was Techfinancials (LON:TECH), which lost more than a quarter of its value after a profit warning.

The software developer said underlying earnings in the first half of the year, while positive, have been affected by an increase in spending on research and development.

Another company shedding a quarter of its market value was Kodal Minerals (LON:KOD), after it published the results of its drilling campaign at the Grimelli copper and zinc project in western Norway.


MOST FOLLOWED

How to pronounce “ofatumumab” is this morning’s poser.

Sometimes it is a relief to be a print journalist rather than a broadcaster, and that usually applies when covering pharmaceutical companies and their bafflingly obtuse names for drugs.

Ofatumumab, which sounds like a New Zealand sheep farm outpost, is in fact a treatment for auto-immune disorders, such as multiple sclerosis, and drugs giant GlaxoSmithKline (LON:GSK) is selling it off to Swiss peer Novartis for up to US$1.03bn.

Ofatumumab already is marketed by Novartis under the brand name Arzerra as a cancer treatment, so the deal tidies things up nicely for both companies.

It is not often that graffiti artist Banksy features on the business channels of a well-known search engine but the fact he is prominently featured today probably tells you all you need to know about news flow on a typically quiet Friday.

The Bristol Post, no less, informs us that tickets to the “much anticipated” Dismaland exhibition by the Bristol-born street artist are set to go on sale this morning.

The exhibition, which riffs on the theme of a dystopian view of a well-known Mickey Mouse organisation, is based in Weston-super-Mare.

It is not often that Petroceltic International (LON:PCI) makes it on to the search engine’s top business stories list either, but having struck a blow against anonymous bad-mouthing on Internet bulletin boards, the company finds itself in the spotlight.

The company has secured a court order to have an allegedly defamatory anonymous blog removed from the Internet.

Wordpress owner Automattic has to take down the blog, according to the order, and it must also block further posts from the blogger.

Not only that, the court has also ordered that the anonymous blogger be identified.

Sector peer Rose Petroleum (LON:ROSE) is also in the spotlight, albeit on the web sites of stock market news peddlers rather than on the search engine sites, after it said it could be on the acquisition trail, targeting cheap assets.

The company said the “current environment provides significant opportunity to acquire quality assets with stable income which are non-core to other companies”.

It all sounds very Warren Buffett-like, buying assets when they are cheap rather than at the top of the market, but the shares are off sharply this morning.

Lastly, and continuing with the theme of subjects that do not often get the spotlight, if the public sector net borrowing (PSNB) numbers get you excited then you will be thrilled to learn that PSNB, excluding public sector banks, fell by £1.4bn in July from a year earlier, which means the budget is in surplus.

Companies coughing up tax receipts – we’re back to search engine companies again (or maybe not) – and government departments reining in spending were the reasons for the return to the black.


MARKET OPEN

Downbeat Chinese manufacturing data and political turmoil in Greece combined to send markets lower on Friday.

The FTSE 100 index retreated 47 to 6,320 as the Caixin flash manufacturing PMI racked up its worst August reading for six years.

Greek premier Alexis Tsipras officially resigned last night, with snap elections set for September 20 and endorsed by the European Union.

The European Central Bank did its best to lift spirits by confirming it had received its latest debt repayment from Athens overnight.

Otherwise, traders were hoping UK economic data would provide some much-needed cheer.

Connor Campbell at spread-betting firm Spreadex said: “News of a public sector net borrowing surplus could help mitigate some of the FTSE’s losses later in the morning, but investors probably shouldn’t hold their breath.”

The S&P 500 posted its worst daily fall since February 2014 on Thursday night, so traders were hoping for better news from  the US August Markit manufacturing PMI later.

The gap between the ISM and PMI widened to one percentage point in July which suggests some downside to the PMI; however, consensus expects a slight increase to 53.9.

Oil prices were on their way down again, with Brent crude dropping 1% to US$46.15 a barrel; that sparked a 2.15p fall in BP’s share price to 367.45p. Royal Dutch Shell was 15.5p off at 1,737.5p.

In thin corporate news, GlaxoSmithKline’s (LON:GSK) stock shed 10p to 1,360.5p as it sold the rights to a multiple sclerosis treatment to rival Novartis for £1bn.

Rose Petroleum (LON:ROSE) leaked 11% to 0.2p as the US explorer said it would change its drilling programme to account for lower oil prices, but also pledged to keep its eye out for cheap acquisitions.

Investors tuned in to marine navigation technology group Software Radio Technology (LON:SRT) by 8% to 31.75p after it won a US$5mln contract from an unidentified US national authority for a national maritime domain management system, plus potential extra future phases.


MARKET PREVIEW

The last day of the week and Spire Healthcare (LON:SPI), the private hospital operator, is a notable reporter on the corporate front, as shares were tipped to open lower.

Broker Numis expects to see the momentum of the first quarter continue across the three payer groups - PMI, Sell-Pay and the NHS - when the company posts interims.

It rates the shares an 'add'.

Analyst Sally Taylor said she expects 10% revenue growth overall  and expects NHS to be remain the strongest organic growth contributor.

She forecasts underlying earnings (EBITDA)  to be US$87mln , which is a margin of 19% and an increase of 8.8% year-on-year.

Notably the analyst said: "We await details of a third new hospital site as well as insight into Spire's longer term plans to gain a foothold in the lucrative London market.

"Development of Spire's cancer centres continues to progress; we expect an update on trading at its Bristol fallibility and a development progress update regarding its site in Essex, which is expected to complete in Q4, 2015."

The NHS continues to face pressures, the broker notes.

"..figures show that waiting lists increased for four months in a row to May 2015 and are now at the highest level seen since February 2008," it also highlighted.

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