Tin hats were very much in demand yesterday. With red covering trading screens across the Square Mile, one of the worst-hit on the mid-tier index was Logica after the resignation of one of the IT outsourcer's top brass revived fears over its troublesome Benelux operations.
The region has been a thorn in the side of Logica recently, and back in 2010 former finance chief Seamus Keating was tasked with turning around its performance there. However, yesterday the group revealed Mr Keating was leaving the company, prompting Merchant Securities' Roger Phillips to warn that "concerns may now grow that this departure suggests problems in the Benelux are intractable".
Deutsche Bank's scribblers were also cautious, suggesting the market could "read this as a quick turnaround in Benelux remains unlikely", although they played down the possibility of trading in the region worsening since February's full-year results.
While Mr Phillips added that he remained "sceptical... there is a genuine turnaround under way", Logica moved to calm fears by saying it still expected Benelux to return to profit this year. However, this didn't stop the group being smacked back 7.25p – or 7.34 per cent – to 91.55p, with Jefferies' Milan Radia not helping matters.
Although the analyst raised his price target by a third to 80p, he also kept his "underperform" rating and dismissed hopes Logica will attract a suitor. Saying it was not "an obvious takeover target", he warned that any potential bidders "will likely be reluctant to dramatically expand their European exposure... and may be turned off by the scale of the remaining restructuring requirement".
Overall, the FTSE 100 suffered its worst session of 2012, slumping 134.57 points, or 2.3 per cent, to 5,703.77 – its lowest since January. With IG Index's Will Hedden noting there was a "perfect storm of reasons to exit the market", one of the major causes was the publication late on Tuesday of the latest US Fed meeting's minutes, which put a major dampener on hopes for QE3.
Fears over the eurozone were also scaring investors, with European Central Bank chief Mario Draghi's warning that the economic outlook for the region had risks to the downside coming after a disappointing Spanish bond auction.
Commodity stocks were among the worst-hit as silver miner Fresnillo took the wooden spoon by retreating 138p to 1,533p while the Roman Abramovich-backed steelmaker Evraz was 26p worse off at 353.6p.
Meanwhile, Glencore slipped back 12p to 389.4p amid speculation the trading giant may be interested in a possible move for Canada's First Quantum. However, traders played the talk down, pointing out Glencore already has its hands full with its attempts to buy Viterra and merge with Xstrata (down 26p to 1,074p). The vague rumours also suggesed Rio Tinto (down 124p to 3,406.5p) and China's CNOOC as potential bidders, although this did not prevent First Quantum – which is listed in both London and Toronto – being pegged back 39p to 1,151p.
No blue-chip stocks managed to end the day ahead, although Shire did better than most. The drugs maker finished 5p worse off at 2,025p as Morgan Stanley's Peter Verdult kept his "overweight" rating, saying it remained "one of the best-positioned pharma companies."
The top performer was International Power, which edged down just 0.8p to 402.2p after rejecting GDF Suez's 390p offer to snap up the 30 per cent of the energy generator not already owned by the French firm
Next dropped 123p to 2,937p following the announcement late on Tuesday that the high street retailer's boss Simon Wolfson – Lord Wolfson of Aspley Guise, to give him his full title – had sold 125,000 of his shares at 3,060p a pop, banking more than £3.8 million. Liberum Capital's Simon Irwin said he "would be strongly tempted to follow Wolfson's lead", although the Tory peer still owns around 1.5m shares, worth roughly £44 million.
On the FTSE 250, Kentz crashed down 35.2p (or 7.44 per cent) to 437.8p after two non-executive directors sold a total of 15m shares through a secondary placing – nearly 13 per cent of the oil and gas services company.
Meanwhile, Phoenix dipped 22p to 545.5p despite UBS's James Pearce repeating his belief that Resolution (6p weaker at 253p on the Footsie) should revive takeover talks with the insurer.
There was a flurry of announcements emerging from Summit, including the drugs group's full-year results and the news that Glyn Edwards had been appointed as its new boss. However, the AIM-listed tiddler also announced a placing of shares at 3p a pop to raise £5m, which left it 45.83 per cent weaker at 3.25p.