So much for the FTSE 100 (FTSEINDICES: ^FTSE) and its rise towards a new 14-year high! Last Friday’s sell-off sent the UK’s top index plunging 110 points, and today it’s down a further 91 points to 6,573 so far — and that’s a fall of 3% in less than two trading days. It seems that a combination of fears, including worries over a bubbling Chinese economy, quantitative easing tapering, US economic data, and a host of other things, has gripped the market.
Some banks are recovering well, but not HSBC Holdings (LSE: HSBA) (NYSE: HSBC.US), whose shares crashed to a 52-week low of 634.9p this morning, That’s a fall of more than 10% over the past 12 months, with the price having slipped 3.7% in less than a week.
The bulk of HSBC’s business comes from the Asia Pacific region — in fact, almost a third of its profits derive from Hong Kong. And if fears surrounding the Chinese government’s attempts to control a double threat of booming credit and property prices are justified, the bank could be hard hit.
Cairn Energy (LSE: CNE) shares hit a 12-month low too today, of 230p, after last week’s year-end update triggered a mini-slump. Although the oil and gas explorer sounded upbeat about its long-term prospects, we still have no real idea when it is likely to generate profits.
And news on Friday of a probe into the company’s tax affairs in India didn’t help, with Cairn now forbidden from selling its remaining stake in Cairn India. Investors will be concerned with the usual slow pace of Indian tax investigations.
The wheels came off the recovery at Mothercare (LSE: MTC) after 8 January’s quarterly update, and today the shares scraped a new low of 262p.
We heard that the 12 weeks to 4 January had seen a 6.1% fall in group sales. Total UK sales were down 9.9%, with a 4% like-for-like fall. Chief executive Simon Calver blamed “difficult UK retail trading conditions and volatility in some of our International markets“.
At today’s prices, Mothercare shares are down 20% over 12 months — back in July they were changing hands for nearly 500p.
> Alan does not own any shares mentioned in this article. The Motley Fool has recommended shares in Cairn Energy.