UK markets reverse earlier gains as BT take-public plan unsettles investors

Writer, Stock Market Wire
Friday, November 15, 2019 - 12:34

UK stocks reversed earlier gains as investors turned cautious at midday following data that shows that Hong Kong has plunged into recession after months of political unrest.

The UK's benchmark FTSE 100 index dropped 42 points into the red at 12pm on Friday, to 7,250.73, having earlier rallied 20-odd points as investors latched onto White House economic adviser Larry Kudlow's comment that current US/China negotiations are 'very constructive'.

Miners remain in demand, albeit, slightly less so, with Rio Tinto, Glencore and BHP all modestly higher on Friday.

Mining titan Rio Tinto lost some of its earlier strength as it said it would support Energy Resources of Australia's $324m fund raising to rehabilitate the Ranger project area in Australia's Northern Territory, in which Rio has a 68.4% stake.

LABOUR LAUNCHES OPENREACH TAKE PUBLIC PLAN

The bigger news on Friday comes at BT, which is facing uncertainty after Labour's Shadow Chancellor John McDonnell unveiled plans to take its Openreach infrastructure arm back under public ownership to support free broadband to Brits nationwide.

BT shares initially declined on Friday, rallying briefly only to fall again, down 2.2% at 190.88p by midday.

The Labour pledge would have wide consequences for many internet service suppliers, which may explain TalkTalk's stock shedding 3% to 105.3p despite swinging to a first-half profit, albeit of just £1m.

New broadband customers helped it boost operating profits.

Premier Inn hotels operator Whitbread tops the FTSE 100 leader board on Friday, adding 3% at £43.08, while housebuilder Berkeley is largest faller, off 3% to £44.38.

RUGGED PULLLED

Struggling flooring retailer Carpetright jumped 14% to 4.85p on news that it agreed to be acquired by Meditor European Master Fund in a deal that valued the company at £15.2m.

Pharmaceutical bellwether AstraZeneca dipped 1% to £72.49, having announced that its drug to improve glucose levels in adults with type-2 diabetes had been approved by the European Commission.

Specialist media platform Future rallied nearly 5% to £15.00 as it lifted its outlook for the current financial year as its annual profit more than doubled, led by growth in its media division.

Video game developer Sumo jumped 7% to 165p after it revealed that Chinese internet giant Tencent had bought a 9.6% interest in the company from existing shareholder Perwyn.

Rival video game group Team17 stayed flat at 325.5p as it announced that chief financial officer Jo Jones had decided to leave the company to take up another role elsewhere. Jones would be replaced on an interim basis by Mark Crawford on 22 November.

ELSEWHERE ON THE MARKET

Residential development finance provider Urban Exposure added 6% to 60p after it said it had received 'a number of additional proposals' regarding its future, without elaborating.

The company had earlier in November said it received an outline restructuring proposal from R20 Advisory, involving a special dividend, rights issue, the externalisation of its management team into a separate vehicle and the company's conversion to an investment group.

Hostel group Safestay firmed 1.5% to 32.5p as it acquired Hotel Auberge in central Berlin for €1.2m. The property was currently operating as a 32-bedroom hotel and 'ideally suited' to being converted into a 150-bed hostel, Safestay said.

Energy group Parkmead gained 5% to 41p as it swung to a full-year profit, buoyed higher gas output from the Diever West field in the Netherlands.

Marketing company for the online gambling sector Veltyco collapsed after announcing that it was exploring additional funding sources and looking to cut costs amid a slump in marketing activities.

Veltyco said its ability to continue as a going concern would be materially impacted if trading deteriorated further and it was not able to secure further funding.

The company's share price crashed 48% to 188p, valuing the minnow at just £1.5m.