The FTSE 100 fell after opening today, slipping nearly 30 points before noon. Shares in advertising giant WPP slipped nearly five per cent following the resignation of charismatic CEO Martin Sorrell and rumours that the company will be broken up after his departure.
“Typically share prices fall on a CEO departure and this morning is no exception, with WPP shares lower, indicating just how much Martin Sorrell matters to the worlds largest advertising company,” said Rebecca OKeeffe, head of Investment at Interactive Investor. “However, the question is whether this fall presents a buying opportunity for investors? The potential breakup of the company is one factor in the plus column for investors, as the sum of its parts may create shareholder value, as is the idea that Sorrells departure may allow the business to properly review its internal strategy to make sure that it remains central and relevant to the hugely dynamic and constantly shifting advertising world.”
The market found some relief from Whitbread, which rose 6.5 per cent after New York hedge fund Eliott Management revealed that it had increased its stake in Britains biggest hotel and coffee-shop operator to more than 6 per cent. However, a dip in oil prices drove down the prices of shares in BP and Royal Dutch Shell.
Overnight, Asian markets were mixed. The Hang Seng Index was down 1.5 per cent, while the MSCI Asia-Pacific index dipped 0.4 per cent. However, Japans Nikkei was up 0.3 per cent. Overall, global markets have steadied in the wake of US-led strikes on Syria.
“The fact that the stock market reaction has been muted to US led military attacks on Assads regime, so far, suggests that investors are not expecting a major escalation on the back of this action,” said Jasper Lawler, head of research at London Capital Group. “Universal condemnation and overwhelming support for the military action makes any retaliation from Syria main supports, Russia or Iran, doubtful. Meanwhile the US, UK and France appear to be viewing this as mission accomplished with no more imminent air strikes anticipated.”