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London Market Report London Market Report
(about 4 hours later)
(Open): Mothercare shares fell 7.6% after the baby goods retailer announced plans for a £100m rights issue. (Noon): Drugs shares pulled the market down sharply after new US tax rules were seen as making several UK firms less desirable for takeovers.
The retailer said it would use about £45m of the money raised to expand its store closure programme and also to refurbish other stores. The US has reduced the benefits to companies who strike what are known as "tax inversion" deals.
The rest of the cash will be used to cut debt and to improve IT systems. Shares in Shire sank 6.2% on fears the changes could threaten its agreement to be bought by AbbVie.
The FTSE 100 opened down 28.05 points at 6,745.58. Tate & Lyle plunged nearly 16% after the sugar and sweeteners maker issued a profit warning. AstraZeneca - which was a takeover target for Pfizer earlier this year - dropped 5%.
Problems with its supply chain means it now expects additional costs of about £20m in the second quarter of its financial year, and it also predicts extra costs of £10m in the second half. The FTSE 100 index was down 89.81 points, or 1.3%, at 6,683.82.
Tate & Lyle is now predicting full-year adjusted pre-tax profits of £230m-£245m. There was further misery for Tesco, a day after its shares plunged 11% on news it had overstated profits guidance by £250m.
Tesco shares fell below the £2 mark a day after shares plunged 11% on news it had overstated profits guidance by £250m. Its shares fell a further 3.9% to 195.05p, despite it announcing that its new chief financial officer, Alan Stewart, was joining the company immediately, more than two months earlier than originally planned.
Its shares fell 1.5% to 199.90p. Tesco announced that its new chief financial officer, Alan Stewart, is joining the company immediately, more than two months earlier than originally planned. Mothercare shares fell 3.9% to 238.50p after the baby goods retailer announced plans for a £100m rights issue.
On the currency markets, the pound dipped 0.02% against the dollar to $1.6359 and fell 0.05% against the euro to 1.2727 euros. The retailer said it would use about £45m of the money raised to expand its store closure programme and also to refurbish other stores. The rest of the cash will be used to cut debt and to improve IT systems.
Tate & Lyle plunged more than 16% to 612.50p after the sugar and sweeteners maker issued a profit warning.
Problems with its supply chain means it now expects full-year adjusted pre-tax profits of £230m-£245m, about 20% lower than analysts had expected.
On the currency markets, the pound rose 0.16% against the dollar to $1.6389 and fell 0.13% against the euro to 1.2716 euros.