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Market report: Trouble piles up for Johnson Matthey in Europe’s car crash

Mark Shapland

Chemicals company Johnson Matthey today joined the list of household names like BMW and Volvo swallowed up by Europe’s car crisis.

Johnson’s clean air unit — which makes catalytic converters for cars and trucks and accounts for 60% of the group’s overall profits — will make less profit for the year than initially expected.

The firm blamed China’s slow implementation of global emissions rules, while analysts said the update was no surprise given the rapid slowdown in car sales across Europe.

The company also said divisional head John Walker would retire after 35 years with the company and would be replaced by Joan Braca, currently president of Tate & Lyle’s food and beverage division. Johnson was the biggest blue- chip faller, losing 117p at 3270p or 4%.

Overall the FTSE 100 lost 20.06 points at 7557.14, dragged lower by oil producers Shell and BP which lost 14p at 2579p and 10p at 534p respectively. Overnight oil prices slid after President Trump and US Secretary of State Mike Pompeo struck a softer tone on Iran.

Precious metal miner Fresnillo was another steep faller after it cut its annual production targets, citing construction delays at its gold mine in Mexico. Its stock fell 16p at 904p.

But it wasn’t all doom and gloom and exporters like British American Tobacco and Diageo were benefiting from the pound’s slide to a two-year low. BATS added 20p at 2971p and Diageo was up 12p at 3431p.

Currency traders are worried about a new hardline approach to Brexit from the Conservative leadership contenders seeking to woo party members.

Both Boris Johnson and Jeremy Hunt have said they could take Britain out of the European Union without a deal at the end of October, potentially sparking chaos and hammering growth. One broker said: “It is increasingly looking like there is going to be something far scarier than ghouls and ghosts on Halloween.”

Luxury clothes maker Burberry was rising for a second straight session after analysts scrambled to upgrade the stock again on the back of robust first-quarter sales yesterday. Its stock was up 73p at 2350p.

Further down the market shares in Emmerson were on the rise after Stagecoach founder Ann Gloag upped her stake in the potash miner to more than 3%.

Gloag is one of Scotland’s richest women and first invested in Emmerson back in June last year when it was re-admitted to the London stock exchange.

Shares were up 0.1p at 3.8p.