It’s not just hot spots like Ukraine and Iraq that can blow a hole in investor confidence – yesterday it was our dear old pal the USA shaking the Footise.
The Treasury has moved to crackdown on so-called “tax inversion” takeover deals – swallowing a rival in another country where the corporation tax is lower and shifting your tax base there. The news sent potential targets of such deals tumbling – AstraZeneca, erstwhile love interest of Pfizer, lost 163.5p to 4,414p; Smith & Nephew, tipped to be snapped up by Stryker, fell 30p to 1,038p; InterContinental Hotels Group, reportedly approached earlier in the year, slipped 27p to 2,406p; and microchip maker CSR, eyed by Texas rival Microchip Technology, dropped 23p to 735p. Shire, set to sell itself to AbbVie for £31bn, also fell 130p to 5,100p, with fears that the new measures could derail proceedings.
The dashed deal hopes contributed to the FTSE 100’s biggest daily fall since March, giving up 97.55 points to 6,676.08. Supermarkets continued to weigh, knocking 3.89 points off, as the fiasco at Tesco, 8.5p lower at 194.5p, rumbled on. And news of Labour’s proposed new “sin” tax on cigarette makers sent Imperial Tobacco sliding 66p to 2,685p and British American Tobacco tumbling 74p to 3,543.5p.
Among the few to register gains was cruise operator Carnival, which put on 6p to 2,443p thanks to a raised full-year profit guidance. Miners also improved on better-than-expected Chinese manufacturing data, adding 4.2 points.
On AIM, stockbroker Panmure Gordon leapt 14.5p to 155p as investors cheered signs of ongoing recovery from the disastrous acquisition of US business ThinkEquity in 2007.
Mobile banking specialist Monitise took a tumble last week after shareholder Visa signalled it could sell up and was planning to invest in rival technology. But UBS helped Monitise up 3p to 35.5p yesterday, as it initiated coverage with an 80p price target.
Regenersis, which specialises in repairing broken gadgets, collapsed 84p to 241p after revealing performance for what its executive chairman dubbed a “transformative” year.