On a quiet day ahead of the Christmas holiday, bad news – well, any news – would not fail to get noticed.
So when BAE Systems (LON:BA.) was hit by a double whammy of negative news, the punishment came in fast: shares dropped to the bottom of the FTSE 100, with losses of over 5% to 420p.
The defence company revealed this morning that discussions with the United Arab Emirates government regarding the sale of a range of defence and security capabilities – including the potential supply of Typhoon combat planes – have collapsed.
Meanwhile, ongoing talks with Saudi Arabia over pricing are dragging out, and a definitive agreement has yet to be reached by the British company and the kingdom.
Negative broker comments followed suit as JP Morgan Cazenove repeated its ‘underweight’ rating and trimmed its target price to 355p.
“The news is setback and odd in many ways,” the broker said in a note to clients.
UBS, meanwhile, retained its ‘buy’ recommendation but pegged back its valuation 15p a share to 475p. The Swiss bank is still confident it will land the major order with Saudi Arabia.
Following jitters earlier this week on concerns over Christmas sales, retailers were leading the gainers on the FTSE 100 on Friday. Tesco (LON:TSCO) added nearly 2% to 330p, while Marks & Spencer (LON:MKS) was up 1.5% to 450.6p.
In the world of small-caps, all eyes remained on Avocet Mining (LON:AVM) after it warned that production for 2013 will fall short of its guidance.
As a result of lower-than-expected production in the third quarter this year, the gold miner now expects 2013 production at the Inata gold mine to be 115,000-120,000 ounces compared with previous guidance of 125,000-130,000 ounces.
This means the group will require additional funding next year. Shares fell 26% to 9.4p.
Anglo Asian Mining (LON:AAZ) will also undershoot its gold production targets for 2013 after cold weather came in early and an unusually high copper content in ore mined recently hit gold recoveries.
Shares dropped 10% to 19.50p.
Better news came from Ortac Resources (LON:OTC), which said its preliminary environmental report had been approved by the regional Slovakian authorities.
This paves the way for the Slovak District Mining Bureau to review the AIM-listed company’s application to mine 1,000 tonnes of gold and silver a year from the existing underground development at the Šturec deposit.
Shares jumped nearly 10% to 0.24p.