The European markets were uniform in their losses on Wednesday, falling after Jerome Powell’s mixed comments on Tuesday evening and ahead of Trump’s meeting with Kim Jong-un and Michael Cohen’s potentially explosive address to Congress.
Down 0.7%, the FTSE once again found itself struggling to keep the right side of 7100, with its mining and banking stocks providing a decent chunk of its losses. Rio Tinto (LON:RIO) was the exception, the commodity giant climbing nearly 2% as it announced a special dividend worth $4 billion following a 56% surge in full year net profit.
Some ITV (LON:ITV) investors switched off after the media firm’s annual results, the stock tumbling 2% as it forecast that total advertising revenue for the first 4 months of 2019 would drop between 3% and 4%. Its losses were limited, however, by a 13% rise in full year pre-tax profit, and the intriguing news that it was in the ‘concluding phase of talks’ with the BBC to form a British rival to Netflix (NASDAQ:NFLX), a paid subscription service that could appear as soon as the second half of 2019.
The day’s biggest headline was the confirmation of one of the tastier rumours that had appeared in the New Year. Marks and Spencer (LON:MKS) and Ocado (LON:OCDO) announced that the former would be buying a 50% share of the latter’s retail business for £750 million, with the joint venture launching no later than September 2020, i.e. when Ocado’s long-held deal with Waitrose expires.
Arguably getting the better half of the deal, the online supermarket – which will save as much as £15 million a year as it will no longer need to pay sourcing fees to Waitrose – added another 3.5%, following on from Tuesday’s 12% surge. As for Marks & Spencer, though the move is a watershed moment in terms of the British icon offering its food wares online, news that it would be issuing £600 million in shares to finance the deal, alongside cutting its dividend payout by 40%, sent the stock 7.5% lower.
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