Market Report: Turbulent ride for aerospace shares

AEROSPACE ENGINEERS went into a tailspin yesterday as bearish words from the aircraft-maker Boeing caused a bout of turbulence in the sector. US investors were said to be keen to dump the aero-stocks after the shock profit warning by the American giant.

They are worried that shrinking demand for Boeing and Airbus aircraft would cripple production of their British-made wings and engines. Broker ABN Amro reinforced the mood, advising clients to fasten their seatbelts and prepare for a bumpy ride in the sector.

British Aerospace was firmly on the bears' radar screens. The shares plunged over 4 per cent to 477.5p, as the market fretted over BAe's role in the Airbus consortium. Rolls-Royce, down 5p to 235p, was also without parachute. Positive noises from HSBC were not enough to lift the turbo- engine maker.

Siebe and BTR, the two electronic engineers engaged to be married, were also affected. The sector malaise combined with doubts over the merger to leave Siebe grounded at 201p, down 9p, and BTR 2.25p lower at 113.75p. The defence engineers' selling spree extended to LucasVarity, down 4.5p to 203.5p.

Smith Industries was the only one to take off, putting on 15p to 840p after the earnings-enhancing acquisition of the US electrocomponents group Entraco for $7.7m.

Footsie kept a low profile after the previous day's disaster. The blue- chip index closed down 30.3 to 5507.2. After a directionless start, sentiment was hijacked by a large opening loss in Wall Street, and a fragile Footsie closed at the day's lowest point. Volume broke through the 1 billion barrier for the second day running, helped by a number of tax-related deals and pre-Christmas book-squaring.

Scottish Power bucked the market trend to close up 23.5p at 657p, thanks to the return of recent rumours. Market insiders believe that the utility giant is preparing a spin-off of its telecoms arms or a long-awaited blockbuster buy in the US. It was denied the Footsie's top spot by Sema, up 20 to 470p, as the market corrected the previous day's rogue trade. Carlton tuned in to a series of buy recommendations after Tuesday's results. The ITV company finished 14.5p higher at 492.5p.

The undercard was hit by a retailers' collapse and a series of profit warnings, which left the mid cap 17 lower at 4804.4 and the small cap 2.7 down at 2036.8.

Arcadia, the Burton-to-Dorothy Perkins frock-maker, started the collapse. The Debenhams spin-off was left looking like a crumpled suit after warning of falling sales and increasing competition. The alarm enraged many analysts, who had been reassured that all was well a few weeks ago. They got their revenge with savage cuts to their earnings estimates and a barrage of downgrades.

Arcadia finished a dishevelled 26.2 per cent lower at 212.5p, the biggest faller in the FTSE 250. Its former parent Debenhams followed suit with a 21.5p fall to 360p.

Reading the list of the other fallers was like taking a stroll down the high street. Sears, the Miss Selfridge chain, was down 7.5 per cent to 196.5p. Next slumped 31p to 444p, Marks & Spencer fell 15.25p to 400p. GUS, the owner of Argos, did even worse as dealers panicked over today's results. The shares crumbled 8.3 per cent to a 52-week low of 574p. Allied Carpets rolled out its own disastrous trading update and slid 2p to 47.5p.

Boots fell 34p to 940p. Market insiders whisper that the chemist is preparing a very downbeat trading update. Sainsbury, down 19p to 478p, added a bit of food flavour to the retailers' debacle.

Dixons' star shone alone in the sector's night. The electrical chain touched an all-time high of 758p, up 18p after an investors' presentation at Goldman Sachs. The bank's clients were impressed with Dixons' burgeoning Internet service.

Marley was the cheer of the mid cap. The building materials group, rose 16.5 per cent to 123p after finding a Belgian white knight to save it from the attack by its smaller rival John Mansfield. Etex, a privately owned company, is bidding 125p a share in cash, well above Mansfield's 97.4p bid.

Rugby Group, another suffering materials-maker, built a rally on its recent underperformance and ended 5.5 p higher at 87p. Tarmac added to the construction rally with a 3.5p rise to 112.5p. A deal with rival Aggregate Industries is said to be close.

Sentry Farming was the market's worst performer The agriculture group dropped 32 per cent to 43.5p after warning of a substantial trading loss for the year. The BSE scare, sterling strength and a slump in crop values did the damage.

Hornby, the maker of toy railways, hit the buffers, as it cautioned that tough trading would derail profits. The shares shed 37.5p to 147.5p.

Cortecs, the biotech group, rebounded 3.5p to 15p following Tuesday's product-delay warning.

SEAQ VOLUME: 1.12 billion

SEAQ TRADES: 68,252

GILT INDEX: 114.24 -0.03

ASTEC, the electronic equipment maker set to fall to US rival Emerson, remained unmoved at 84.5p as two directors sold their stakes. Howard Lance, chief executive, sold 50,000 shares at the 85p offer price for pounds 42,500. Neal Stewart, technical director, dumped 1.25 million shares for over pounds 1m. Mr Stewart, one of Astec's founders, also cashed in options, netting over pounds 700,000. Emerson yesterday increased its Astec holding to 87.3 per cent.

BUYERS WERE deaf to Hidden Hearing's plight yesterday. The recently floated retailer of hearing aids fell over 10 per cent to 117.5p, after warning of tough conditions in the UK and Ireland. The group, which owns 43 branches in the UK, revealed that increased marketing expenses to keep sales afloat will hit margins at the year-end. The group remains on the lookout for earnings-boosting acquisitions.

Start your day with The Independent, sign up for daily news emails
Sport
sportSo, how closely were you paying attention during 2014?
Arts and Entertainment
Dennis speaks to his French teacher
tvThe Boy in the Dress, TV review
News
One father who couldn't get One Direction tickets for his daughters phoned in a fake bomb threat and served eight months in a federal prison
people... (and one very unlucky giraffe)
Arts and Entertainment
Joel Edgerton, John Turturro and Christian Bale in Exodus: Gods and Kings
film
PROMOTED VIDEO
Arts and Entertainment
Brendan O'Carroll as Agnes Brown in the 2014 Mrs Brown's Boys Christmas special
tvCould Mrs Brown's Boys have taken lead for second year?
News
i100
Arts and Entertainment
The Plaza Theatre in Atlanta, Georgia was one of the 300 US cinemas screening
filmTim Walker settles down to watch the controversial gross-out satire
Sport
Alexis Sanchez missed a penalty before scoring the opening goal with a header at the back post
footballArsenal vs QPR match report
News
Members and supporters of the lesbian, gay, bisexual, transgender (LGBT) community walk with a rainbow flag during a rally in July
news
News
i100
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
Amy Adams and Christoph Waltz in Tim Burton's Big Eyes
film reviewThis is Tim Burton’s most intimate and subtle film for a decade
Arts and Entertainment
Jack O'Connell stars as Louis Zamperini in Angelina Jolie's Unbroken
film review... even if Jack O'Connell is excellent
Arts and Entertainment
Madonna is not in Twitter's good books after describing her album leak as 'artistic rape and terrorism'
music14 more 'Rebel Heart' tracks leaked including Pharrell Williams collaboration
News
i100
Sport
Rooney celebrates with striker-partner Radamel Falcao after the pair combine to put United ahead
footballManchester United vs Newcastle match report
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: Quantitative Research | Equity | New York

Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

Day In a Page

A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all