Global fears knock FTSE, Ei says cheers to pub bid

‘The US side is reportedly considering how to address China’s requests to relax restrictions on Huawei’s trade in the US and earlier this week president Trump resumed his forceful rhetoric on China trade,’ said City Index senior market analyst Fiona Cincotta.

In London, Asia-exposed stocks were among the big fallers. Precious metals miner Fresnillo (FRES) dropped 7.5% to 827p and luxury fashion brand Burberry (BRBY) returned some of its gains earlier this week, stepping back 2.2% to £22.93.

The mid-cap FTSE-250 index also drifted, down 75 points or 0.4% to 19,539, despite Ei Group soaring 39% to 285p after Slug & Lettuce owner Stonegate Pub Company agreed to buy the business for 285p a share, a 38% premium to its previous closing price.

‘The timing was perfect as its estate was cleaned up just in time for Ei to be in prime position to benefit from a structural shift in the market from food to drinks-led demand,’ said AJ Bell investment director Russ Mould. ‘Ei is all about the latter and so it is perhaps no surprise that one of its closest rivals thought it was time to join forces.

‘The shares were trading at 27p in January 2012 and Stonegate is now offering 285p cash per share – implying an incredible 955% return for any investor who held the stock during its darkest times.’

This lifted rivals: 

  • Mitchells & Butlers (MAB) +3% to 305p;
  • Fuller Smith & Turner (FSTA) +5.3% to £10.85;
  • Greene King (GNK) +1% to 651p;
  • Marston’s (MARS) +1.8% to 122p;
  • JD Wetherspoon (JDW) +2.8% to £15.06.
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EasyJet (EZJ) shares climbed 3% to £10.66, after the budget airline reaffirmed full-year year profit targets.  

On the Alternative Investment Market, online clothing retailer Asos (ASC) dived 14% to £23.49, blaming troubles in its international warehouse facilities for its second profit warning in just over six months.

‘While the company says it expects the current issues to be resolved by the autumn it is difficult to know whether to place much faith in that forecast,’ said Ian Forrest, investment research analyst at The Share Centre.

‘The shares have fallen 60% over the past year and are likely to remain volatile until a line has been drawn under the warehouse problems, so investors should remain very cautious.’



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