London close: FTSE slips on oil drop and global growth worries

London stocks tripped up on Monday as weaker oil prices weighed on the energy sector, the pound made a stuttering recovery from losses last week and warnings about global growth from China and the IMF.

The FTSE 100 dropped just over 61 points of 0.8% to 7,600.45, as the pound gained ground in the morning before giving up most of this territory to end at 1.3237 and fall 0.2% versus the euro to 1.1304.

Energy shares dropped in tandem with oil prices amid reports that Saudi Arabia was offering extra crude supplies to some of its customers following a plan to boost output. Oil giants BP and Shell both sank lower as Brent crude slid more than 4% to $72.22 a barrel and West Texas Intermediate declined 3.8% to $68.31.

"Having posted a new high for the year just a few weeks ago, any dip in oil still looks like a buying opportunity," said market analyst Chris Beauchamp at IG.

"The problem for those hoping for a tech-led rally in the next few days is that this has already happened – while the banks continue to underperform, tech stocks have surged. While it is never wise to take a bearish view of tech earnings, some short-term weakness is still possible if Netflix fails to live up to expectations. Based on the price action since 2009, however, that still looks like a strong candidate for a buying opportunity."

Meanwhile, mixed Chinese data did little to lift the mood. Figures released earlier showed the economy slowed modestly in the second quarter, with GDP growth of 6.7%, down from 6.8% in the first quarter but in line with expectations.

Fixed asset investment slowed to 6% in June from 6.1% in May and industrial production slid to 6% last month from 6.8% in May, missing expectations for 6.5% growth. However, retail sales rebounded from multi-year lows of 8.5% in May to come in at 9%, meeting expectations.

Later the IMF warned that current trade tariff threats by the US and its trading partners risked lowering global growth by as much as 0.5% by 2020, resulting in around $430bn in lost GDP worldwide.

Closer to home, after calls over the weekend by former front bencher Justine Greening for a second Brexit referendum such, a likelihood was resolutely ruled out by Downing Street, under "any circumstances".

Neil Wilson, market analyst at Markets.com said: "Theresa May is assailed on all sides and the only thing that we can really confidently say is that this is heading nowhere fast. Her compromise risks a split in the Tory part, and it probably won’t be approved by the EU anyway.

"Political uncertainty may weigh on the pound but we do have a trio of UK economic data releases coming up this week that could tilt the Bank of England towards raising rates in August. Chiefly a jump in inflation back in the direction of 3% due to rising energy and food prices could be enough to persuade enough doves to back the hawks."

The latest survey from Rightmove was nothing to shout about, showing annual house price growth slowed to 1.4% this month from 1.7% last month, as the number of properties coming to market jumped 8.6% compared to the same month last year, with no corresponding rise in buyers numbers "to soak up new seller influx".

On a monthly basis, average asking prices slipped 0.1% versus a 0.4% increase in June.

Rigtmove said estate agents now have the highest amount of stock per agent since September 2015, while the proportion of seller already on the market that are reducing their asking prices is the highest at this time of year since 2011.

In corporate news, Indivior surged after a US court granted a preliminary injunction to prevent Dr Reddy's Laboratories from selling a generic version of the company's opioid addiction treatment until a decision is made on patent litigation.

John Laing Infrastructure also rallied after a consortium of funds announced a possible cash offer for the business, valuing it at £1.45bn.

London's banking stocks were boosted by much better-than-expected second-quarter results from Deutsche Bank, with Barclays and Standard Chartered both lifted into the green.

Meggitt was on the front foot as it announced a $21m contract with the US Defense Logistics Agency to supply fuel cell equipment for the UH-60 Black Hawk helicopter until 2022.

On the downside, Hargreaves Lansdown was the worst performer on the FTSE 100 as it emerged that the Financial Conduct Authority might ban exit fees on investment platforms to help boost competition in the sector. The regulator said it was concerned consumers could lose out because competition between platforms such as Hargreaves was not working as well as it should.

Meanwhile, there were more signs of trouble on the high street as Debenhams retreated after denying reports that it was facing a cash crisis following reports over the weekend that credit insurers have cut cover for suppliers to the department store chain.

In broker note action, Micro Focus was hit by a downgrade to 'underperform' at Credit Suisse, but Countryside Properties was boosted by an initiation at 'buy' from Deutsche Bank, while Anglo American, ASOS and Ferrexpo were all upgraded by Citi.

AA was cut to 'equalweight' at Barclays while Go-Ahead was the biggest faller on the FTSE 350 following a downgrade to 'hold' at HSBC and more headlines about its hapless Gova Thameslink joint venture.

Market Movers

FTSE 100 (UKX) 7,600.45 -0.80%
FTSE 250 (MCX) 20,800.55 -0.06%
techMARK (TASX) 3,564.98 -0.34%

FTSE 100 - Risers

Ocado Group (OCDO) 1,054.50p 2.43%
Smith (DS) (SMDS) 496.00p 1.25%
CRH (CRH) 2,718.00p 1.00%
Barclays (BARC) 191.44p 0.97%
International Consolidated Airlines Group SA (CDI) (IAG) 674.40p 0.93%
Just Eat (JE.) 847.20p 0.88%
Paddy Power Betfair (PPB) 8,495.00p 0.77%
Standard Chartered (STAN) 675.30p 0.64%
Reckitt Benckiser Group (RB.) 6,489.00p 0.59%
Sage Group (SGE) 623.00p 0.58%

FTSE 100 - Fallers

Micro Focus International (MCRO) 1,244.00p -2.89%
BHP Billiton (BLT) 1,609.20p -2.48%
Severn Trent (SVT) 1,895.00p -2.37%
BP (BP.) 557.50p -2.33%
WPP (WPP) 1,216.00p -2.33%
United Utilities Group (UU.) 716.60p -2.32%
Royal Dutch Shell 'B' (RDSB) 2,672.25p -2.14%
Royal Dutch Shell 'A' (RDSA) 2,593.50p -1.97%
Standard Life Aberdeen (SLA) 306.60p -1.92%
Hargreaves Lansdown (HL.) 2,019.00p -1.85%

FTSE 250 - Risers

John Laing Infrastructure Fund Ltd (JLIF) 139.60p 18.10%
Indivior (INDV) 348.30p 16.93%
Rank Group (RNK) 185.60p 5.22%
International Public Partnerships Ltd. (INPP) 148.80p 4.49%
HICL Infrastructure Company Ltd (HICL) 151.00p 4.35%
Alfa Financial Software Holdings (ALFA) 170.00p 3.53%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 319.00p 2.90%
Elementis (ELM) 261.00p 2.84%
Fisher (James) & Sons (FSJ) 1,886.00p 2.63%
TP ICAP (TCAP) 274.00p 2.62%

FTSE 250 - Fallers

Go-Ahead Group (GOG) 1,389.00p -9.22%
Tullow Oil (TLW) 217.40p -6.33%
Premier Oil (PMO) 127.70p -6.23%
Stagecoach Group (SGC) 152.90p -4.74%
AA (AA.) 117.95p -4.30%
Cairn Energy (CNE) 230.60p -4.24%
Wood Group (John) (WG.) 612.60p -3.97%
Dixons Carphone (DC.) 183.25p -3.60%
Hunting (HTG) 754.00p -3.58%
Dunelm Group (DNLM) 506.50p -2.78%