Monday’s Master Investor Market Report

– The FTSE 100 closed the day at 6,505.13, a decrease of 74.68 points.
– The FTSE 250 fell by 231.55 points to 17,267.56.
– The FTSE All Share sank 41.43 points to 3,554.48.
– The FTSE AIM All Share finished 7.16 points lower at 747.76.

The Chinese stock market saw its biggest falls since 2007 today as the Shenzen closed 7.6% down and the Shanghai Composite lost 8.5%. According to the Xinhua press agency, two thirds of firms listed on the Chinese mainland lost 10% of their value and were suspended as a result. The development is linked to investors’ lack of faith in the Beijing government’s stabilisation strategies.

Merlin Entertainments (MERL) shares fell by 17.9p to 405.2p following the release of a trading update which said that while first half results would meet expectations, the recent serious accident at Alton Towers was having a significant negative impact on trading in the key summer period. Management now estimate that full year EBITDA will be up to £47 million below last year’s level. UBS commented that the weakness could generate a buying opportunity, but Barclay’s warned that promotional work to rebuild activity will take time.

Budget airline Ryanair (RYA) reported that revenues in the quarter ended 30th June rose by 10% to €1.49 billion (£1.06 billion) due to bumper customer numbers outweighing a drop in average fares. Post-tax profits for the period climbed 25% to €245 million (£174.6 million). Ryanair shares dropped 2.44% to €11.97.

LED manufacturer Dialight (DIA) saw its shares sink by 15.88% to 461p after pre-tax profits collapsed in the half-year ended 30th June, dropping by 75% from the comparative period last year to £1.7 million. N+1 Singer put its “buy” rating under review and said that the news was worse than expected, while Investec’s Michael Bloggs wrote that he expected “a big improvement in the second half due to recovering productivity in the Mexican Lighting plant, but we believe that there should be downward pressure on consensus estimates, not least due to less helpful exchange rates”.

Petra Diamonds (PDL) said that production in the year ended 30th June rose by 2% to 3.2 Mcts, but falling average diamond prices caused revenues to decline by 10% to $425 million (£273.93 million). Management said that the company is in a transitional period as it works to develop fresh areas of its mine and improve recovery. Analysts from FinnCap stuck with their “buy”, but cut the target price to 207p in light of changes to the firm’s guidance for the new financial year. Petra shares rose by 4.4p to 146.2p.

Tomorrow’s news today

BP (BP.), ITV (ITV) and Jardine Lloyd Thompson (JLT) are among the firms that will publish interim results tomorrow.

Quote of the day

“Take calculated risks. That is quite different from being rash.”
– George S. Patton