London midday: Stocks fall further; precious metals miners shine on haven appeal
London stocks fell a little further into the red by midday on Tuesday as concerns about Brexit, Italy's budget and US-Saudi tensions dented investors' appetite for risk.
The FTSE 100 was down 0.8% to 6,984.19, while the pound was up 0.2% against the dollar at 1.2991 and 0.1% firmer versus the euro at 1.1320.
Worries about souring relations between the US and Saudi Arabia were undermining sentiment after Donald Trump said on Monday that he was not satisfied with the Kingdom's response over the killing of journalist Jamal Kashoggi.
Turkish President Erdogan stirred the pot with a speech on Tuesday, sparking concerns about a diplomatic crisis in the region. Addressing MPs from his ruling party, Erdogan said there was strong evidence that Kashoggi's killing was premeditated and demanded that Saudi Arabia give answers about where the journalist's body was and who ordered the operation.
Meanwhile, Italy was still very much in focus as the European Union is due to give its decision on the country's budget later in the day. Konstantinos Anthis, head of research at ADSS, said all indications suggest that the EU will reject the plan that proposes a material increase in fiscal spending, violating the bloc's 2% budget deficit rules.
Oanda analyst Craig Erlam said: "The selloff came following a reversal in fortune in the US on Monday, where early gains fizzled out and some additional selling late in the session appeared to rattle the markets. This apparent lack of confidence even in the US - which has shown more resilience than its Asian and European counterparts in recent months - has spread anxiety throughout the markets and got people talking about the prospect of a greater downturn.
"This is coming back to the number of underlying risk factors in the markets right now, be it US interest rates, Brexit, Italian debt, trade wars or emerging markets. These are all destabilising factors and sentiment may finally be caving under the weight of it all."
On home soil, the Confederation of British Industry released data showing that new orders in the UK manufacturing sector fell at the fastest pace in three years in the three months to October, with investment intentions slashed as business optimism dims due to stuttering Brexit negotiations.
A survey of Britain's industrial sector found a balance of 6% of firms reporting lower orders, down from a -1% balance in the previous survey and the weakest since October 2015 as both domestic orders and export orders both fell into negative territory. Economists had expected another -1% reading.
On the corporate front, GVC Holdings was under the cosh again amid expectations that chancellor Philip Hammond will clamp down on offshore gambling companies in the Budget next week.
Avast slumped as private equity firm Summit Partners sold 52.5m shares in the cybersecurity provider at 275p each.
Whitbread was lower after it posted a 2.6% rise in first-half sales and underlying pre-tax profits as weaker consumer demand hit UK growth of its Premier Inn hotels.
Anglo American retreated after reporting a 1% year-on-year increase in third-quarter total production on a copper equivalent basis.
St James's Place was also in the red as flow growth slowed in the third-quarter, though funds under management grew to a record £100.6bn.
Intu Properties lost ground after the shopping centre owner said the value of its properties declined 3% since July due to negative investment sentiment towards UK retail property.
Drinks maker Britvic was on the back foot as online fashion retailer ASOS poached its chief financial officer.
On the upside, Plus500 racked up health gains as it posted a drop in third-quarter revenue on the back of low volatility and new regulations but said trading for 2018 should be ahead of expectations.
International distribution and services group Bunzl ticked up as it said third-quarter revenue increased by 7% at constant exchange rates and announced the acquisition of Volk do Brasil, a distributor of personal protection equipment based in Parana, Brazil, for an undisclosed sum.
Builders' merchant Travis Perkins rallied as it hailed a "solid" third quarter, while precious metals miners Randgold, Fresnillo, Centamin, Polymetal and Hochschild Mining shone as gold prices pushed higher.
Utilities were also on the rise, with United Utilities, Severn Trent and Centrica all up as investors looked for safe havens.
In broker note action, Drax was upgraded to 'add' at AlphaValue and Ascential was lifted to 'buy' at Peel Hunt.
HSBC was cut to 'neutral' at Citi, while CYBG was initiated at 'underweight' by Barclays.
Market Movers
FTSE 100 (UKX) 6,984.19 -0.83%
FTSE 250 (MCX) 18,439.10 -1.70%
techMARK (TASX) 3,271.64 -1.14%
FTSE 100 - Risers
Fresnillo (FRES) 927.50p 3.56%
National Grid (NG.) 850.00p 2.50%
British American Tobacco (BATS) 3,445.00p 2.47%
Imperial Brands (IMB) 2,665.00p 2.13%
United Utilities Group (UU.) 722.73p 1.59%
Randgold Resources Ltd. (RRS) 6,366.00p 1.11%
Unilever (ULVR) 4,160.00p 1.08%
Severn Trent (SVT) 1,874.50p 0.97%
Centrica (CNA) 148.47p 0.83%
Pearson (PSON) 885.40p 0.80%
FTSE 100 - Fallers
GVC Holdings (GVC) 883.00p -5.81%
Smith (DS) (SMDS) 362.40p -4.88%
Melrose Industries (MRO) 156.60p -4.77%
St James's Place (STJ) 985.80p -4.71%
Mondi (MNDI) 1,703.00p -4.49%
Scottish Mortgage Inv Trust (SMT) 461.83p -4.43%
Rentokil Initial (RTO) 283.80p -3.96%
Burberry Group (BRBY) 1,645.15p -3.76%
Halma (HLMA) 1,240.00p -3.73%
Ocado Group (OCDO) 824.60p -3.67%
FTSE 250 - Risers
Plus500 Ltd (DI) (PLUS) 1,310.00p 4.97%
Travis Perkins (TPK) 1,015.00p 3.57%
Centamin (DI) (CEY) 103.85p 2.82%
Howden Joinery Group (HWDN) 449.30p 2.51%
IG Group Holdings (IGG) 579.50p 1.93%
Hochschild Mining (HOC) 171.30p 1.93%
Crest Nicholson Holdings (CRST) 311.10p 1.67%
Convatec Group (CTEC) 153.75p 1.38%
Telecom Plus (TEP) 1,184.00p 1.20%
Pennon Group (PNN) 738.60p 0.63%
FTSE 250 - Fallers
Avast (AVST) 276.52p -6.36%
IntegraFin Holding (IHP) 295.00p -5.45%
Amigo Holdings (AMGO) 227.00p -5.42%
Provident Financial (PFG) 509.00p -5.39%
Thomas Cook Group (TCG) 39.64p -5.26%
Jupiter European Opportunities Trust (JEO) 761.00p -4.88%
Quilter (QLT) 115.34p -4.79%
Babcock International Group (BAB) 594.20p -4.38%
Kaz Minerals (KAZ) 451.50p -4.24%
Beazley (BEZ) 520.00p -4.15%