London close: FTSE lurches to 20-week low as tech, oilers wobble
London's blue chip benchmark dropped to a 20-week low on Thursday amid lingering global trade concerns, softer oil prices and as a Wall Street tech wobble knocked UK digital peers.
With a final lurch lower, the FTSE 100 closed down 64.3 points or 0.9% to 7,318.96, its lowest finish since 18 April.
Another fall in crude prices hit oil-related stocks, with Brent crude was down 1.7% to $75.94 a barrel, and US stocks indices opening in the red were the cause of the late-session decline, with the tech-heavy Nasdaq taking the brunt of the downward move. This former saw oil giants BP and Shell both in the red, while the latter saw London tech names Just Eat and Ocado Group lead the fallers on the Footsie, with Sophos and Alfa Financial Software also stumbling.
Sterling added some pressure on the overseas-focused index, rising more than 0.2% against the dollar to 1.2936 and 0.3% higher versus the euro at 1.1128, still underpinned by a report on Wednesday that Germany was prepared to make compromises on the Brexit deal.
Meanwhile, trade tensions remained heavy in the air to dim trader appetite, especially a day ahead of the end of the consultation period for another potential set of American tariffs on Chinese goods. This could see President Trump levy a bumper 25% tariff on $200bn-worth of goods from the People's Republic on Friday.
Talks between the US and Canada were looking like running on for at least another week. Although there were optimistic sounds from both sides, with Canadian foreign minister Chrystia Freeland saying they were making "good progress."
IG analyst Chris Beauchamp was sanguine about the market's mini correction: "such a pullback is entirely healthy, and indeed welcome, and fits well within the historical pattern of both an average September and of those in mid-term years such as this. It still feels like trade concerns and emerging market worries are merely excuses for a market that has, in the near-term, run out of reasons to move higher."
On the corporate front, the biggest faller was Sirius Minerals after the Yorkshire mine developer revising its capital expenditure estimate up 13.5% from $3.7bn to $4.2bn, which is expected to result in its stage-two funding requirement increasing by $400-600m.
Weir Group slumped as it highlighted a recent softening in demand for original equipment and some order book delivery deferrals.
Wood Group fell despite saying that Hess Corporation has awarded the company a three-year non-exclusive agreement for the provision of operations, maintenance and other support services in the Gulf of Mexico.
BCA Marketplace slipped even as it hailed a strong start to the year, while Genus tumbled as its full-year revenue missed forecasts.
Retailer Dixons Carphone was lower as it reported a 2% revenue drop for the first quarter and a flat like-for-like performance but maintained its full-year guidance.
On the upside, utilities rallied as investors breathed a sigh of relief after Ofgem's proposed price cap came in in line with expectations, ending uncertainty for the sector.
The energy regulator said energy suppliers will not be allowed to charge a typical dual-fuel customer paying by direct debit more than £1,136 a year under the new price cap. Analysts had pencilled in a range of between £1,100 and £1,160.
Russ Mould, investment director at AJ Bell, said the findings of the report were "no worse than expected".
"There’s nothing the market hates more than a lack of clarity and now the level of the price cap is known analysts can reflect it in their earnings estimates. This should help reinforce the credibility of earnings and most importantly dividend forecasts," he said.
Centrica was the biggest riser, with SSE also on the leaderboard, with water companies United Utilities and Severn Trent also firmer.
Melrose Industries racked up strong gains after saying it found "no black holes" in the GKN business and progress since its £8bn hostile takeover was completed in April. The turnaround specialist also reported a statutory loss before tax of £303m for the half year after booking significant acquisition-related charges but only including 73 days of trading from GKN.
Bovis Homes advanced after it posted a 41% jump in first-half pre-tax profit as completions rose and the housebuilder said it was targeting a record year of profits, at the top end of its expectations.
Govia Thameslink operator Go-Ahead Group surged as full-year results came in ahead of consensus expectations at the operating profit level.
McCarthy & Stone was on the front foot even as the retirement housebuilder downgraded its operating profit guidance for the year following a "tough" year but posted a rise in revenue.
Just Group rallied as its first-half results came in ahead of expectations on most metrics, but the company said it has deferred its interim dividend as the outcome of the lifetime mortgage review remains unknown.
In broker note action, Redburn downgraded HSBC to 'sell', while Liberum downgraded Bodycote to 'hold' and IMI to 'sell'. It also initiated coverage of Smiths at 'hold', while Vodafone was lifted to 'buy' at Citi.
Shire, RSA Insurance, Land Securities, Glencore, CRH, BHP Billiton, Antofagasta, Admiral Group, Savills, Rathbone Brothers, Polymetal, Pagegroup, Meggitt, Kaz Minerals, John Laing Infrastructure, IWG, Greggs, G4S, ConvaTec, Clarkson and Aggreko all went ex-dividend.
Market Movers
FTSE 100 (UKX) 7,318.96 -0.87%
FTSE 250 (MCX) 20,283.49 -0.51%
techMARK (TASX) 3,433.92 -0.83%
FTSE 100 - Risers
Centrica (CNA) 150.55p 4.99%
Melrose Industries (MRO) 230.00p 3.28%
United Utilities Group (UU.) 723.60p 1.52%
Severn Trent (SVT) 1,951.50p 1.51%
Rightmove (RMV) 481.90p 1.51%
Barratt Developments (BDEV) 553.20p 1.47%
Berkeley Group Holdings (The) (BKG) 3,576.00p 1.07%
Taylor Wimpey (TW.) 168.00p 0.96%
National Grid (NG.) 810.30p 0.92%
Persimmon (PSN) 2,392.00p 0.84%
FTSE 100 - Fallers
Just Eat (JE.) 700.00p -5.36%
BHP Billiton (BLT) 1,540.20p -4.55%
Ocado Group (OCDO) 998.40p -4.14%
Admiral Group (ADM) 2,029.00p -3.20%
NMC Health (NMC) 3,638.00p -2.57%
Glencore (GLEN) 303.80p -2.56%
Antofagasta (ANTO) 776.40p -2.49%
Land Securities Group (LAND) 887.00p -2.37%
Scottish Mortgage Inv Trust (SMT) 532.30p -2.33%
Paddy Power Betfair (PPB) 6,885.00p -2.28%
FTSE 250 - Risers
Go-Ahead Group (GOG) 1,830.00p 11.93%
FirstGroup (FGP) 95.95p 6.79%
Energean Oil & Gas (ENOG) 556.00p 4.91%
Barr (A.G.) (BAG) 743.00p 4.50%
Redrow (RDW) 599.25p 3.47%
McCarthy & Stone (MCS) 114.90p 2.95%
Hill & Smith Holdings (HILS) 1,027.00p 2.39%
Euromoney Institutional Investor (ERM) 1,320.00p 2.32%
IP Group (IPO) 130.60p 2.20%
Assura (AGR) 56.00p 2.18%
FTSE 250 - Fallers
Sirius Minerals (SXX) 27.36p -16.41%
Weir Group (WEIR) 1,632.00p -8.62%
Genus (GNS) 2,572.00p -6.61%
Sophos Group (SOPH) 493.20p -4.97%
Bodycote (BOY) 898.50p -4.73%
IMI (IMI) 1,150.00p -4.49%
Hikma Pharmaceuticals (HIK) 1,934.50p -3.25%
G4S (GFS) 233.30p -3.24%
Playtech (PTEC) 487.00p -3.22%
Bakkavor Group (BAKK) 172.80p -2.70%