Almost £1 billion was wiped off the value of water companies as investors braced for greater political scrutiny ahead of the general election.
Shares in Severn Trent, United Utilities and South West Water owner Pennon have plunged amid suggestions that regulator Ofwat will delay its review of the sector until after election day on July 4.
The scandal-hit industry is likely to come under fire and has been heavily criticized for paying out hundreds of millions of pounds in dividends despite anger over the pollution.
Pennon said this week it would pay £3.5 million in compensation to Devon customers who fell ill after drinking water contaminated with parasites.
It also announced a dividend of £127m to shareholders.
Election drop: Shares in Severn Trent, United Utilities and South West Water owner Pennon plummeted following Rishi Sunak’s election announcement.
It comes as private company Thames Water struggles for survival as it struggles under an £18bn debt pile.
Severn Trent shares fell 5.2 per cent, or 136 pence, to 2,503 pence, while United Utilities fell 4.9 per cent, or 53 pence, to 1,024 pence and Pennon lost 7.1 per cent, or 47p, to 618p. This wiped £900 million off its value.
Energy companies were also hit and Drax faced a further delay in getting its carbon capture project approved by ministers.
It fell 8.6 per cent, or 47.5 pence, to 507.5 pence, while Centrica fell 2.3 per cent, or 3.4 pence, to 143.9 pence.
And National Grid added to the misery by announcing a £7bn rights issue to fund £60bn of investments.
The FTSE 100 fell 0.4 per cent, or 31.10 points, to 8,339.23 and the FTSE 250 fell 0.4 per cent, or 78.77 points, to 20,631.30.
Stock Watch – Tate & Lyle
Ingredient maker Tate & Lyle outlined plans for a share buyback following the sale of its stake in a US company.
The sweetener brand sold its remaining 49.7 per cent stake in Primient to private equity firm KPS for around £279 million.
The buyback came alongside full-year results that showed profits rose 48 per cent to £226m in the 12 months to the end of March.
The shares rose 5.2 per cent, or 35p, to 712p.
The Competition and Markets Authority watchdog is to investigate the veterinary sector amid concerns over rising pet bills, after its initial review generated 56,000 responses.
AIM-listed CVS rose 2.5 per cent, or 26p, to 1,062p as it said it would “continue to proactively support” the investigation.
But investors in Pets at Home may have been spooked by his silence. The stock fell 2.3 per cent, or 6.6p, to 276.2p.
Wizz Air soared 10.5 per cent, or 206 pence, to 2,168 pence after flying a record number of passengers (62 million) in the year to the end of March, up 21.4 per cent on the previous year.
Revenue rose 30.2 per cent to £4.3bn, while it returned to a profit of £312m, after making a loss of £456m a year earlier.
Great Portland Estates (down 1.3 per cent, or 5.5p, to 417p) has swapped properties with the City of London, buying one lease for £28.6m, selling another for £18.23m and outlining plans to raise around £350m, to issue 152m new shares at 230p, to spend on assets and make more acquisitions.
London’s West End is “busy and vibrant”, owner Shaftesbury Capital said, as sales pick up. His estate signed 147 leases worth £22.4m in the first five months of the year, but shares fell 2.2 per cent, or 3.1p, to 139p.
Chemicals group Johnson Matthey sank 1.2 per cent, or 21p, to 1,786p, after revenue fell 14 per cent to £12.8m in the year to the end of March, while Profits fell 39 per cent to £249m.
General insurance premiums at Aviva rose 16 per cent to £2.7bn in the first quarter, but fell 2.7 per cent, or 13.3p, to 482.9p.