Market Report: Drax loses power after decision to cut subsidies for the coal-fired power station

Drax lost power yesterday after the Court of Appeal backed the Government’s decision to cut subsidies for the coal-fired power station.

The market had expected the power plant to win, after the High Court found in its favour last month and told the Government to award it a state subsidy for converting one of its coal-fired units to burning biomass. But the overturning of that decision yesterday pushed the shares down more than 8 per cent, or 58.5p, to 651.5p. The Yorkshire-based energy company was the worst faller on the mid-tier table.

The wider market was still in the red and fell 38.79 to 6,597.37.

Mike van Dulken, head of research at Accendo Markets, said: “The combined weight of geopolitical uncertainty and disappointing macro data – especially from Germany, the supposed eurozone powerhouse – is keeping a lid on any further advances.”

The worst faller on the benchmark index was a bottling business. Coca-Cola HBC, the second-largest bottler for the Coca-Cola Company and its brands, revealed that second-quarter net profits were 6 per cent up on a year earlier. But it warned that the “escalation of the geopolitical situation in Russia and Ukraine has affected consumer spending” and put trading at risk, and added that “unemployment levels remain high and disposable income is still constrained” in many of the regions where it operates. It tumbled 73p to 1,302p.

At the other end of the table, ARM Holdings rose 19p to 870.5p on a rumour about a new deal with Apple. Trustnet Direct’s market analyst, Tony Cross, said: “ARM has had a decent session, with some talk across the tech press that Apple could be plotting a move to replace Intel chips with those made by ARM in its new kit from 2016 onwards.

The software group Sage was also popular and it lifted 11.4p to 382.1p.

Shoppers snapping up cheap birthday cards helped Card Factory to post strong sales growth and deliver a 5p share price rise to 210p. But the shares are still below its May float price of 225p. It is one of a raft of companies that have listed this year but are still to make it past their offer price.