London close: Stocks drop as Ryanair weighs on airlines, Trump tweet dents sentiment
London stocks fell on Monday as US President Trump's latest Twitter outburst knocked sentiment, while a disappointing update from Ryanair weighed on airlines.
The FTSE 100 ended down 0.3% at 7,655.79, while the pound was down 0.1% against the dollar at 1.3113 and flat versus the euro at 1.1200 after Foreign Secretary Jeremy Hunt warned during a press conference in Berlin that there is now a "very real risk of a Brexit no deal by accident" if EU negotiators don't change their approach.
IG analyst Chris Beauchamp said: "Sterling’s bounce off the lows of last week seems to have run its course, not helped by the warning from the new foreign secretary that the risk of an accidental no-deal Brexit had increased. The UK government seems to have decided on this kind of tough talk approach ahead of the next round of negotiations, both for home consumption and in order to send a strong message to the EU. It looks like we are in for a difficult few weeks."
Meanwhile, in a tweet on Sunday to Hassan Rouhani, Trump warned the Iranian President to "never, ever threaten the US again". The tweet came after Rouhani reportedly cautioned that Americans "must understand that war with Iran is the mother of all wars and peace with Iran is the mother of all peace".
Trump retaliated by tweeting, in caps: "Never, ever threaten the United States again or you will suffer consequences the likes of which few throughout history have ever suffered before. We are no longer a country that will stand for your demented words of violence and death. Be cautious!"
Investors were also still assessing Trump's threat from last Friday to impose tariffs on all Chinese imports, equivalent to about $500bn.
IG analyst Joshua Mahony said: "Donald Trump once again remains the main player within global markets, as the ability to disrupt market stability means that his temperamental tweeting can often take precedence over traditional economic releases.
"While the latest online conflict between Iran and the US will grab the headlines, markets are still reeling from Trump’s announcement that he is considering placing tariffs onto all Chinese imports."
Adding to the downbeat tone was a warning from the finance leaders at the G20 summit that growth was becoming less synchronised among major economies and that downside risks over the short- and medium-term had increased.
"These include rising financial vulnerabilities, heightened trade and geopolitical tensions, global imbalances, inequality and structurally weak growth, particularly in some advanced economies," G20 finance officials said.
Looking ahead to the rest of the week, European Commission President Jean-Claude Juncker is due to meet Trump at the White House on Wednesday.
On the corporate front, airlines were under the cosh, with EasyJet and British Airways parent IAG the top fallers after budget carrier Ryanair posted a 20% drop in first-quarter pre-tax on the back of higher costs, lower fares and strikes.
IWG slipped after saying that its suitors - TDR Capital, Terra Firma and Starwood - have been given more time to make an offer for the serviced office group, as Prime Opportunities dropped out of the race.
FDM Group fell despite reporting a 12% increase in first-half profit as it invested in expanding its more profitable "Mountie" IT consultancy operation.
BHP Billiton was a touch lower after saying it would defend a class action by investors over the Samarco dam disaster of 2015 that killed 19 people. The claim, served in Australia, alleges BHP breached disclosure obligations and engaged in misleading and deceptive conduct.
Shopping centre owner Hammerson declined as it exchanged contracts for the sale of two retail parks for £164m to Capreon, while Ascential, formerly EMAP, retreated after the release of its interim results.
Capita lost ground following a report that the Ministry of Defence has suspended an outsourcing contract to provide firefighting services on military sites after Serco began a legal challenge to the decision.
In broker note action, Hargreaves Lansdown retreated after a downgrade to 'underperform' at Jefferies, while Elementis was hit by a downgrade to 'neutral' from 'buy' at Bank of America Merrill Lynch.
BT was among the top gainers as the government said it will spend up to £5bn to bring full fibre broadband to all parts of Britain by 2033, while Paragon Banking ticked higher after saying it was on track to deliver expected year-end results.
Anglo American edged up as Anglo American Platinum upped its stake in the Mototolo joint venture project after buying out Glencore's 39% share.
Market Movers
FTSE 100 (UKX) 7,655.79 -0.30%
FTSE 250 (MCX) 20,770.38 -0.74%
techMARK (TASX) 3,579.63 -0.40%
FTSE 100 - Risers
Ocado Group (OCDO) 1,143.00p 5.54%
WPP (WPP) 1,191.00p 3.12%
DCC (DCC) 7,170.00p 2.14%
Just Eat (JE.) 878.00p 1.78%
Associated British Foods (ABF) 2,448.00p 1.62%
BT Group (BT.A) 222.25p 1.28%
HSBC Holdings (HSBA) 722.00p 0.96%
GlaxoSmithKline (GSK) 1,564.60p 0.95%
Ashtead Group (AHT) 2,325.00p 0.52%
GVC Holdings (GVC) 1,106.00p 0.36%
FTSE 100 - Fallers
Taylor Wimpey (TW.) 170.20p -3.95%
Fresnillo (FRES) 1,089.50p -2.98%
Barratt Developments (BDEV) 516.60p -2.97%
Persimmon (PSN) 2,433.00p -2.84%
Micro Focus International (MCRO) 1,247.00p -2.12%
Hargreaves Lansdown (HL.) 2,083.00p -1.93%
Rightmove (RMV) 5,108.00p -1.81%
Imperial Brands (IMB) 2,863.50p -1.80%
TUI AG Reg Shs (DI) (TUI) 1,615.00p -1.80%
Mondi (MNDI) 2,009.00p -1.71%
FTSE 250 - Risers
TI Fluid Systems (TIFS) 256.00p 4.07%
Euromoney Institutional Investor (ERM) 1,390.00p 3.73%
Sirius Minerals (SXX) 34.96p 3.50%
Clarkson (CKN) 2,460.00p 2.71%
Just Group (JUST) 124.40p 2.30%
Premier Oil (PMO) 123.10p 2.07%
Bank of Georgia Group (BGEO) 1,807.80p 1.97%
RPC Group (RPC) 778.00p 1.78%
Contour Global (GLO) 244.00p 1.67%
Sophos Group (SOPH) 506.50p 1.50%
FTSE 250 - Fallers
Ascential (ASCL) 433.40p -5.66%
Elementis (ELM) 247.20p -4.19%
Moneysupermarket.com Group (MONY) 302.00p -4.13%
Workspace Group (WKP) 1,077.00p -3.93%
Rathbone Brothers (RAT) 2,518.00p -3.67%
Big Yellow Group (BYG) 940.00p -3.59%
Bellway (BWY) 2,857.00p -3.54%
Bovis Homes Group (BVS) 1,112.00p -3.47%
Redrow (RDW) 520.00p -3.35%
Wizz Air Holdings (WIZZ) 3,599.00p -3.25%