(Alliance News) - Stock prices in Europe were lower on Thursday afternoon, with Wednesday's bond market intervention by the Bank of England providing only temporary respite for unnerved investors.
Sentiment was hurt on Thursday morning after another leak was found on gas pipelines connecting Europe and Russia.
Nord Stream leaks have been one of the week's key sub-plots for financial markets, and accusations of foul play have soured already damaged relations between Russia and the West.
Adding fuel to the fire, the Kremlin announced on Thursday that the four Russian-occupied regions of Ukraine that held referendums derided internationally as a sham will be annexed by Russia on Friday.
The FTSE 100 index was down 57.26 points, or 0.8%, at 6,948.13 midday Thursday. The mid-cap FTSE 250 index was down 339.99 points, or 1.9%, at 16,986.98. The AIM All-Share index was down 6.10 points, or 0.8%, at 807.88.
The Cboe UK 100 index was down 0.8% at 693.42. The Cboe 250 was down 2.1%, at 14,506.49, and the Cboe Small Companies was down 0.2% at 12,674.95.
The CAC 40 stock index in Paris and the DAX 40 in Frankfurt were both 1.3% lower.
US stocks were called lower. The Dow Jones Industrial Average was pointed to open down 0.8%, the S&P 500 1.0% lower and the Nasdaq Composite down 1.3%.
The Kremlin said Thursday that a foreign state was likely responsible for an incident that resulted in the leaks at the Nord Stream 1 and 2 gas pipelines linking Russia to Europe.
Suspicions of sabotage emerged after the first leaks were detected earlier this week. Moscow denied it was behind the explosions, as did the US, saying Moscow's suggestion it would damage the pipeline was "ridiculous".
Nato on Thursday said leaks from the Nord Stream gas pipelines appeared to be sabotage and vowed a "determined response" to any attacks on critical infrastructure.
Sterling traded higher despite rising global tensions. The pound fetched USD1.0850 midday Thursday, firm from USD1.0763 at the London equities close on Wednesday. The euro rose to USD0.9689 from USD0.9645. Against the yen, the dollar rose to JPY144.69 from JPY144.41.
In London, Next shares slid 9.2%, among the worst large-cap performers.
The clothing and homewares retailer lowered its annual guidance as it believes that the tough trading it experienced in August and cost-of-living pressures will offset any boost from recent UK government stimulus measures.
Full price sales advanced 12% year-on-year in the first half ended July 30, though the company now expects a decline for the second half. Full price sales are to shrink by 1.5% year-on-year. It had previously guided for 1% growth.
Next also lowered bottom-line guidance. It now expects annual pretax profit of GBP840 million, down from the previous GBP860 million guidance, but up 2.1% on last year.
Half-year revenue climbed 12% to GBP2.38 billion from GBP2.12 billion a year earlier. Pretax profit advanced 16% year-on-year to GBP400.6 million from GBP346.7 million.
Shares in Barratt Developments fell 12%. The housebuilder went ex-dividend on Thursday, meaning new buyers would no longer qualify for the latest payout.
The wider residential property sector also succumbed to selling pressure after a property listing platform warned of a housing market slowdown.
Zoopla said price sensitivity is showing signs of returning to the UK housing market as house buying power takes a hit, amid recent Bank of England rate hikes.
Taylor Wimpey shares fell 6.1%, while estate agent Purplebricks lost 4.9%.
Synthomer lowered guidance, putting the Essex-based chemicals maker at the rock bottom of the FTSE 250, down 36%.
It now expects its 2022 earnings before interest, tax, depreciation and amortisation to be 10% to 15% below previous expectations. Synthomer put this down to weaker macro conditions hitting its European business.
One mid-cap stock on the up, however, was Capricorn Energy, rising 4.6%.
Capricorn proposed a merger with NewMed Energy Ltd Partnership and withdrew its recommendation for a previously agreed tie-up with Tullow Oil.
Capricorn will acquire NewMed shares in exchange for its own stock. The exchange ratio will be 2.33 new Capricorn shares for every NewMed participation unit.
The combination will mean Capricorn shareholders hold 10.3% of the enlarged group's share capital while NewMed will hold 89.7%. The company will trade under the name NewMed Energy, and it expects to retain its premium listing on the London Stock Exchange.
The merger will create one of the largest upstream energy independents listed in London. Capricorn said that the new company will have a diversified portfolio of "high-quality producing assets" in Israel and Egypt underpinned by 45% interest in Leviathan, one of the world's "most attractive" gas fields.
The board unanimously supported the merger and as a consequence has removed its recommendation from the Tullow deal which it had recommended in June. Although it said it "continues to see merit in the Tullow combination", the NewMed deal offered a more "compelling opportunity to receive value from both upfront cash and via a residual interest in a MENA gas and energy gas champion."
Tullow shares were 3.3% lower.
Elsewhere on the M&A front, Attraqt shares jumped 66% to 29.00 pence, giving it a market capitalisation of GBP58.5 million.
Attraqt backed a GBP63.2 million takeover offer. Technology company Crownpeak will pay 30p cash per share in the London-based provider of online search, merchandising and personalisation solutions for e-commerce.
In mainland Europe, luxury sports carmaker Porsche raced onto the Frankfurt stock exchange on Thursday with one of Europe's biggest listings in years, leveraging its brand power to defy global market turmoil.
Its shares climbed to EUR85.36 on Thursday afternoon, up 3.5% from its EUR82.50 IPO price.
Porsche's is the biggest stock market debut in Germany since Deutsche Telekom's in 1996, and the largest in Europe since the 2011 flotation of miner Glencore. Porsche raised EUR9.4 billion in the IPO.
Gold traded at USD1,649.09 an ounce midday Thursday in London, down from USD1,653.20 late Wednesday. Brent oil rose to USD89.63 a barrel from USD88.17.
Still to come on Thursday, there is a German inflation reading at 1300 BST and US gross domestic product and core personal consumption expenditures at 1330 BST.
By Eric Cunha; ericcunha@alliancenews.com
Copyright 2022 Alliance News Limited. All Rights Reserved.
