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Investors demonstrating "cold-bloodedness" over Wolseley, says Accendo

Edward Swift

LONDON (ShareCast) - (ShareCast News) - Shares (Berlin: DI6.BE - news) in Wolseley (LSE: WOS.L - news) have plunged on the back of news that some markets remain "challenging" despite some positive results from the building materials distributor. The FTSE 100 listed company released its full year results to 31 July 2015 on Tuesday.

Accendo Markets' head of research Mike van Dulken said with Wolseley on Tuesday and Glencore (Xetra: A1JAGV - news) on Monday, investors are demonstrating cold-bloodedness.

"[Investors are] concerned at 'markets remaining challenging' outside the US and European performance mixed.

"Most worryingly of all, however, is an outlook stating that the 'heating market in the UK is expected to remain very competitive with little growth'.

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"In an environment where equity markets are tough and interest rates exceptionally low, income is more important than ever and a 'pledge to return any excess cash after meeting investment needs' is clearly seeing C-suite performance metrics (EPS, acquisition) being favoured." Van Dulken said that with most of 2015's share price progress now undone, "shareholders are clearly re-evaluating their holdings as the shares 'sink' back to 'tap' fresh 9-month lows".

CMC Markets' Jasper Lawler said the trouble is that volatility breeds volatility.

"When Glencore stock plunges 27%, it creates an expectation that there could be a double digit drop on any company news." Wolseley shares were down 494p (11.82%) to 3,685p at 1120 BST.