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Stock markets around the world fell sharply today amid growing fears that the US economic revival has stalled.
Shares on Wall Street were sent reeling on Friday, following a sharp drop in consumer confidence. The shock waves reached Asia this morning where Hong Kong and Shanghai both plunged, along with Tokyo, despite news that the Japanese economy had emerged from recession after reporting its first quarterly growth in more than a year. The selling spilled over into London where leading shares extended Friday's losses. The FTSE 100 index fell 35.4 to 4678.5.
Mining shares were among the hardest hit after a softening in raw material prices. Rio Tinto shed 75p at 2281p, Randgold 81p to 3457p and Anglo American 56p to 1871½p.
City speculators turned their firepower on Raymarine after reports at the weekend that it had received an approach from Garmin in the US, best known for sat-nav in cars. Shares soared almost 50%, up 6¼p to 20½p. But there was no word from Raymarine, which is headed by Peter Ward, who is also chairman and chief executive officer of Roll-Royce and Bentley motor cars and luxury cruise line operator Cunard.
Last month Raymarine said it was looking for a cash injection, or to sell the business after it posted a 24% slump in first-half sales. It has appointed Hawkpoint as an adviser. Panmure Gordon has doubled its target from 12p to 24p and raised its rating from hold to buy, saying Raymarine has an uncertain financial future unless new funds or a new owner emerges.
Meridian Petroleum firmed 3¼p to 56¾p amid growing optimism the oil exploration may soon strike it rich. Meridian says results from its seismic survey on its PEL 82 license in South Australia has increased prospects for oil discoveries. Possible drilling locations are being further evaluated.
But rival Hardy Oil & Gas marked time at 301¼p despite plunging into the red with a net loss of $4.3 million (£2.6 million) in the first half. That compares with a profit of $6.2 million for the corresponding period last year. The company says it is to drill its first well on the D9 exploration block during the second half of the year.
Altium Securities appears to be doing some catching up with Carpetright, down 8p at 822p. It has raised its target price from 450p to 590p, but continues to rate the shares a sell. Earlier this month the Carpetright share price struck a 19-month high after the UK's biggest carpet retailer reported a return to underlying sales growth. It also cheered the City by saying it would benefit from any signs of recovery in the housing market and the closure of some rival Allied Carpets stores. Deutsche Bank was among those which upgraded its rating from hold to buy.
Shares of Majestic Wine have enjoyed a strong performance of late, coming up from around the 188p during the past month alone to trade today, down 7½p at 213p. But Altium reckons the shares have run far enough and has downgraded its rating from hold to sell.
News that Japan's economy has emerged from recession failed to struck much of a chord with investors. Share prices across Asia fell sharply this morning, including in Tokyo, where the focus of attention was on the faltering US economy. Leading shares retreated from 10-month highs, with exporters hit as the yen rose against the dollar on concerns about how quickly the American economy will recover.
Traders said the Nikkei 225 Average, which reached a 10-month closing high on Friday, succumbed to profit-taking after the GDP news. It ended down 328.72 points at 10,268.61 after closing 0.8% higher on Friday, its highest finish since 3 October last year.
But shares of drugmakers and companies that produce medical masks and the fabrics used to make them jumped after news of Japan's first death from the H1N1 flu.
Hong Kong shares fell to their lowest in more than two weeks, tracking losses on the mainland bourses.
Oil and coal shares were weak as crude prices fell below $67 a barrel, and metal shares slid as Shanghai metals futures prices sank. The Hang Seng index was down 727.63 points at 20,165.70.
