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Amazon's acquisition of Whole Foods sends shockwaves through retail sector

16 June 2017 16:54

Domestic and overseas retailers were left stunned after online retailer Amazon announced it would buy American supermarket chain Whole Foods for $13.7bn.

UK supermarkets Tesco (TSCO) and Sainsbury's (SBRY) slumped by 4.9% and 2.2% to 171.1p and 256.5p. Marks & Spencer (MKS) also declined by 1.9%.

In the US, several retailers, including Target and Wal-Mart, tumbled by up to 10%.

Brent crude oil advanced 0.6% to $47.20 per barrel. Gold was stable at $1,253 per ounce and copper stumbled 0.2% to $5.643 per tonne.

FTSE 100 RISERS AND FALLERS

High demand for fresh food is a positive for for UK supermarket chain Tesco. The company beat market expectations as it reported a 2.3% increase in like-for-like sales in the three months to the end of May.

According to media speculation, activist shareholder Elliot Management welcomed the appointment of former Amcor CEO Ken MacKenzie as the next chairman of BHP Billiton (BLT), replacing Jac Nasser.

The new chairman would have to deal with calls to ditch its oil division and attempts to refresh the board. Shares in the mining giant nudged 0.2% lower to £11.58.

Aircraft engine maker Rolls-Royce Holdings (RR.) rallied 1.4% to 907.5p after starting 2017 on a strong footing. It said that all divisions performed in line with its expectations.

FTSE 250 RISERS AND FALLERS

According to reports, Australian financial services firm Link Group and three buyout funds were finalising the last details for their rival offers for Capita's (CPI) asset management services division. The deal was expected to be worth up to £800m. Shares in Capita were flat at 645.5p.

A lucrative contract win for Amec Foster Wheeler (AMFW) failed to push the stock higher as it retreated 0.6% to 480.2p. It won a contract worth A$298m for the Gruyere gold project in Western Australia with its joint venture partner Civmec Construction and Engineering.

SMALL CAP RISERS AND FALLERS

Among the high flyers in the small cap space was Avanti Communications (AVN). The satellite telecoms services provider sealed a deal with investment firm HPS for a $100m three-year super senior facility, sparking a 20.6% jump in the stock to 9.6p.

On readmission to the London Stock Exchange, Flying Brands (FBDU) was up 30.8% to 4.2p. The investment company completed the acquisition of Stone Check Software.

Story provided by StockMarketWire.com

Related Company: TSCO

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