Yahoo Finance Market report: Rolls-Royce shares dive to 12-year low
Shares in Rolls-Royce touched a 12-year low on Monday as speculation that the group will launch an equity raise continued.
The FTSE 100 engineer – which has seen its price battered as a result of Covid-19 – dipped as much as 8pc during the session, touching its lowest level since 2008.
However, news of the group’s plans to work with Virgin Galactic to develop engine propulsion technology for high-speed commercial aircraft helped it pull out of its nosedive, to close down 1.2p at 230.4p.
In a note to investors last week, Jefferies’ Sandy Morris said the path for Rolls is now all about cutting the business down to a more sustainable size. She added that the sale of new shares, or equity, to raise funds looks likely, but “cannot be forced to happen soon”. Rolls was helped out of the red by a strong day for London’s blue-chips, which shook off a mixed opening to join a rebound across European equities.
It marked a solid start to August, a month known for increased volatility, which is often ascribed to lower levels of liquidity as many traders go on summer holidays. Whether the virus will change things remains to be seen – certainly, there are many more investors who will be stuck at their desks.
News flows were relatively thin during the session, with purchasing managers’ index data confirming a rebound in manufacturing activity across the UK, eurozone and US.
The FTSE 100’s international earners were given an extra boost by the pound, which edged slightly lower against the dollar.
Lloyds Banking Group was the FTSE 100’s biggest riser, up 1.6p to 27.9p, to claw back a big chunk of the ground it lost after revealing a £602m first-half loss last Thursday.The lender’s rise came amid a broader boost for financial stocks, with Hargreaves Lansdown, Aviva, NatWest and Prudential all among the top performers. Their fortune was not shared by HSBC, which led blue-chip fallers with a 9.95p drop to 332.3p after posting its first-half results, which included a heavy fall in profits prompted by the pandemic.
On the FTSE 250, intellectual property investor IP Group was one of the top performers, jumping 12pc, or 8.1p, to 74.6p, after Oxford Nanopore – in which IP holds a 16pc stake – partnered with the Government to roll out LamPORE, a new Covid-19 test that can produce results within just two hours. Under the terms of the deal, 450,000 tests will be made available for use in NHS laboratories.
IP’s chief executive Alan Aubrey said the rollout was a “significant development for Oxford Nanopore”, while Matt Hancock, the Health Secretary, said it “will benefit thousands of people with fast and accurate test results”.
