React Energy (REAC)

 

FTSE down as oil sags on China stocks rout, PSON falls

FTSE indices were heavily lower as UK, US and European markets reacted to a China equities massacre overnight that, along with supply-glut concerns, sparked a slump in crude prices. Pearson (PSON) and Merlin Entertainments (MERL) led UK blue chips south.

FTSE 100 closed down 74.68 points, or 1.13%, to 6505.13. FTSE 250 was down 231.55, or 1.32%, to 17,267.6. Wall St was much lower. Germany's DAX lost 2.42% and France's CAC 40 shed 2.46%. China's Shanghai index nosedived 8.47% overnight. At 4.41pm, WTI crude was down 1.58% at $47.38/bbl and Brent was off 2.14% at $53.45/bbl. Gold prices bounced.

Pearson (PSON) faltered 4.76% to 1161p on confirming talks with The Economist Group's directors and trustees regarding the potential sale of its 50% stake in the group. Merlin (MERL) swooped 4.28% lower to 405p as it stated a serious accident at Alton Towers had hurt summer trading and its FY expectations. Sage slid 3.79% slide to 520.5p.

Financials were left in tatters. 3i Group (III) lost 3.31% to 540.5p, RSA Insurance (RSA) fell 3.16% to 437.8p, and London Stock Exchange (LSE) eased 2.57% to 2537p. About 25 blue-chip stocks were more than 2% lower. Easyjet (EZJ), Antofagasta (ANTO), WPP (WPP), Dixons Carphone (DC.), Tesco (TSCO) and Persimmon (PSN) all surrendered 2.05%-3.01%.

Big banks were led south by Barclays (BARC), down 1.9% to 276.8p. Surprisingly oil majors didn't figure among the biggest losers. BP (BP.) retreated 1.87% to 387.3p, while oil-price sensitive Carnival (CCL) lost 1.63% to 3349.5p. BG Group (BG.), down 0.53% to 1030p, said its recommended offer from Shell (RDSA) has been okayed by Brazil.

Meantime, Reckitt Benckiser (RB.), up 1.44% to 5993p, has improved its H1 pretax profit to £921m, from £838m. Miners figures in the northbound queue. Randgold (RRS) added 1.34% to 3794p, with Fresnillo (FRES) and BHP Billiton (BLT) broadly tracing its rise. Several utilities also made limited gains.

BIGGER MOVERS

Golden Saint (GSR), down 31.03% to 0.1p, raised £250,000 gross on July 22 via a placing of 312.5m shares at 0.08p each, plus 125m warrants over ordinary shares convertible at an exercise price of £0.001 and valid for three years from today.

React Energy (REAC), down 36.36% to 7p, after its shares exited temporary suspension at 7.30 a.m. Sula Iron & Gold (SULA) fell 20.85% to 0.93p on a second price-monitoring extension. Dialight (DIA) lost 15.88% to 461p as its statutory operating profit dived 96% to £0.2m.

Zegona (ZEG), up 12.5% to 153p, has reached agreement with The Carlyle Group and Liberbank to acquire Telecable de Asturias SA, which is a quad-play telecommunications operator in Asturias, northwest Spain, for an enterprise value of 640m euros.

MySale (MYSL), backed by retail grandees Philip Green and Mike Ashley, rose 10.63% to 44.25p on a positive FY trading update. After a a poor H1, MySale's H2 performance improved and management now expects a return to profitability at the EBITDA level in the coming year.

ECONOMIC NEWS

Stateside, durable goods orders rose 3.4% to o $235.3bn in June, US Department of Commerce said. This hike, up after two consecutive monthly falls, followed a 2.1% May decrease. Core durable goods, excluding transportation, rose 0.8% in June.

UK's CBI industrial order expectations index declined to -10 in July, from -7 previously and against expectations for a print of -4. Meantime, Euro zone's M3 money supply came in at 5.0% in June, unchanged from its previous reading but just below forecasts for a print of 5.1%.

German import prices declined 0.5% month-on-month in June, official data showed. This was ahead of market expectations, and from a 0.2% decline in May. Germany's Ifo Business climate index printed at 108 in July, from 107.4 in June and marginally ahead of market expectations.

LONDON HIGHLIGHTS

Regency Mines (RGM), up 9.09% to 0.06p, is mulling a near-term cash generative investment in the US. Due diligence has begun in relation to opportunities to acquire non-operating interests in a portfolio of oil and gas projects with proven flow-tested production.

Transense Technologies (TRT) said subject to shareholder approval the placing and offer for subscription have raised a total of £2.6m, providing it with a significantly strengthened balance sheet. TRT's shares fell 9.23% to 1.48p.

Source BioScience (SBS), up 8.04% to 15.13p, is to add microbiology, chemistry and physical property testing to its expertise after agreeing to buy Select Pharma Laboratories for £7.3m.

Benchmark (BMK) gained 7.26% to 66.5p on buying Norwegian aquaculture genetics and research business Akvaforsk and 80% of its US business for £11m.

PhotonStar LED Group (PSL), up 7.14% to 3.75p, has secured a substantial supply contract for its Camtronics Vale contract manufacturing business, with a leading-edge UK-based professional electronics company.

Ariana Resources (AAU), down 5.47% to 0.95p, has raised £1m gross via a placing and subscription. Proceeds would be used primarily for further exploration and resource development of the Kiziltepe sector of the Red Rabbit gold project in western Turkey.

Other stocks in the news included Vast Resources (VAST), Hiscox Retail (HSX), Ryanair (RYA), CVS (CVSG), Cranswick (CWK), Fever-Tree (FEVR), bwin.party digital entertainment (BPTY), Senior (SNR), ImmuPharma (IMM), Horizon Discovery (HZD), Mariana Resources (MARL), Kenmare Resources (KMR) and MX Oil (MXO).