Monday, 5th March: Ultra Electronics plummeted today following the news that they are backing away from the £170 million Spartan Corp acquisition as a result of anti-trust concerns raised by the U.S Department of Justice. As a result, shares were down c.19% at the open to £11.99, and down by almost 46% from the highs of £22.04 they reached in March 2017. By the end of the day, Ultra Electronics’ shares had somewhat recovered from the massive losses at the open, but not much. The group were trading down by 9.87% at the close.
In the UK, the services sector made an unexpected u-turn in February after reaching a 10-year low of 53.0 in January. The PMI result shattered forecasts of marginal growth to 53.3 for February after the actual figure demonstrated growth to a four-month high of 54.5. Making less progress in the UK which has drawn the wrath of PM Theresa May are the housebuilders. May has urged those working in the sector to meet the housing shortage demands by building new homes quicker than the pace they have been chugging along at in recent years. The failure of the British government to meet homebuilding targets has resulted in rising prices, consequently leaving first-time buyers and young Britons in situations where they must postpone buying a home or choose the alternative of renting because the properties which are being built are simply unaffordable.
The hung outcome of the Italian election over the weekend sent European indexes marginally higher at the open as investors attempted to absorb the news, but EUR was slightly down against both GBP and USD. The Stoxx 600 was up around 0.64% at 11:00 (GMT), and at the same time EUR/GBP and EUR/USD were both down 0.17% and 0.08% respectively. The final result of the election is due to be released later on in the day.
Following almost a full week of declines by the FTSE 100, the blue-chip index had a decent start to the new week and was up c.0.20% by mid-day. However, only shortly after at 14:10 (GMT), they were trading flat at exactly 0.00% due to increasing pressure on Rentokil Initial after the market reacted badly to a profit warning which was embedded in the full year results which were released late last week, and were otherwise fairly impressive and encouraging for the group. The pest control and hygiene services provider was trading down more than 4.0% in the afternoon, placing it at the bottom-end of the blue-chip index.
The FTSE 100 and 250 recovered before they ended the day, up 0.65% and 0.93% respectively, regardless of the large losses made by Rentokil and Ultra Electronics.