FTSE 250 movers: Worsening conditions sees Poundland pounded

Stocks on the FTSE 250 plunged on Thursday, before recovering somewhat by the afternoon.

The second-tier market was down 278.91 points (1.63%) to 16,780.07 by mid-afternoon.

Poundland was the market’s biggest victim after it said that disastrous trading conditions in November continued through the third quarter.

The discount retailer, including the newly acquired 99p Stores, said it experienced strong sales growth across its operations for the 13 weeks ended 27 December 2015, with total sales for the quarter growing 29.4%. “However, the trading conditions that we experienced in November continued through the third quarter, with high street customer numbers down year-on-year and this has impacted sales growth,” said Poundland chief executive Jim McCarthy. He indicated the retailer was still expecting pre-tax profit for the full year to be towards the lower end of market expectations, between £39.8m and £45.8m.

Miners again dragged the market down amid growing concerns about China, one of the world’s largest commodities consumers, after the country had its shortest trading day in history.

For the second time this week China's new 'circuit-breaker' kicked in and froze trading just 15 minutes after the open, though the rule has since been suspended. The Shanghai Composite Index finished down 7.04% after the brief trading day, at 3,125. Its losses over the last four days now come to 11.7%, and could see the biggest weekly loss since August's correction. It was thought that the weakening of the yuan in the morning first triggered the losses, which then spread like wildfire across the region. Traders and analysts remained concerned about a weaker yuan causing capital flight, and a knock-on effect of currency depreciation in other Asian countries.

"People outside of China just go 'woah', and think the rest of the region should be bombing out as well", said Parry International Trading managing director Gavin Parry, saying the morning's losses set off a "contagion effect in sentiment". As a result, commodities stocks Evraz and Vedanta Resources featured in the markets biggest fallers.

Falling oil prices made matters worse for oil and gas exploration companies Ophir Energy and Nostrum Oil & Gas. Prices of Brent crude edged down 2.83% to $33.26 a barrel, while West Texas Intermediate dropped 3.06% to $32.93 as geopolitical flare-ups in the Middle East between Iran and Saudi Arabia compounded oversupply concerns.

However it wasn’t all doom and gloom, with OneSavings Bank leading the risers after Investec upgraded it from ‘hold’ to ‘buy’, and highlighted the "clear value" in the stock after the shares' 18% fall since mid-December.

Analysts suggested the recent sell-off may reflect market reaction to the HM Treasury consultation on higher rates of stamp duty land tax on purchases of additional residential properties, launched on 28 December. “However, we still see OneSavings as a primarily a 'capital-constrained' bank, and it is this capital constraint, not market size, which limited loan growth to £0.9bn (29%) in 2014, and, we think, £1.2bn (31%) in 2015e, £1.1bn (22%) in 2016e and £1.2bn (19%) in 2017e.”

Home Retail Group continued to rise after Sainsbury's revealed earlier in the week it is still considering making a takeover offer for the company after a November approach for the FTSE 250 retail group was rejected.

The FTSE 100 grocer said it was considering its position but there was no certainty that this will result in a formal offer, after the board of the Argos and Homebase owner rejected its initial shares-and-cash proposal before Christmas. Although takeover rumours have been swirling around it, Home Retail has been one of the most shorted stocks on the London Stock Exchange since it issued a profit warning in September due to the uncertainty around Black Friday. The supermarket group said that it believed "the combination of Sainsbury's and Home Retail Group is an attractive proposition for the customers and shareholders of both companies, establishing a platform for long-term value creation".

FTSE 250 - Risers

OneSavings Bank (OSB) 320.00p 3.19%
Home Retail Group (HOME) 136.60p 3.17%
Acacia Mining (ACA) 185.50p 2.32%
Supergroup (SGP) 1,530.00p 1.80%
JD Sports Fashion (JD.) 1,046.00p 1.36%
Allied Minds (ALM) 414.00p 0.98%
John Laing Infrastructure Fund Ltd (JLIF) 117.10p 0.60%
Circassia Pharmaceuticals (CIR) 316.60p 0.51%
PayPoint (PAY) 917.50p 0.49%
Tate & Lyle (TATE) 580.50p 0.43%

FTSE 250 - Fallers

Poundland Group (PLND) 169.10p -11.93%
Amec Foster Wheeler (AMFW) 392.70p -7.75%
B&M European Value Retail S.A. (DI) (BME) 247.10p -7.35%
Evraz (EVR) 66.60p -6.26%
Vedanta Resources (VED) 244.00p -6.23%
Fidelity China Special Situations (FCSS) 129.80p -6.21%
Ophir Energy (OPHR) 86.50p -6.08%
Nostrum Oil & Gas (NOG) 358.10p -5.39%
Indivior (INDV) 177.00p -5.14%
Diploma (DPLM) 703.00p -5.00%