London close: Stocks caught out by Trump wrong-un

London stocks tumbled on Thursday afternoon like wickets in an England cricket innings, as Donald Trump bowled a geopolitical googly that had investors caught on the back foot.

The FTSE 100 finished 71.7 points lower, a fall of 0.9% to 7,716.74 for an eight-day low as a risk-off mood descended on markets around the world when the US president called off planned talks with North Korea.

Share prices had started higher, taking encouragement from Wall Street's stronger finish, but stronger-than-expected retail sales data lit a fire under the pound to dampen the overseas-focused blue chip index.

By the close, sterling had given up the best of its gains against the dollar, to stand around 0.3% higher at 1.3384 and flat versus the euro at 1.1413.

The Office for National Statistics showed that retail sales volumes rose much more than forecast in April as the industry recovered well from the weather-induced slump the month before. Retail sales in April climbed 1.6% month-on-month and 1.4% on the year, comfortably exceeding the consensus forecast of 0.9% for monthly growth and 0.2% for the year.

Chris Beauchamp, chief market analyst at IG, said: "UK retail sales provided some relief from the economic gloom that seemed to hang over markets yesterday, and taken with yesterday’s CPI figure perhaps things are looking a bit rosier for UK consumers. Whether that helps the beleaguered high street is another matter entirely, since more than one month of heavy shopping is going to be needed to rescue the UK retailers."

After President Trump's latest blindsiding, Ken Odeluga, market analyst at City Index, added: "The frequency of sharp comments emitted from Pyongyang over the last few days intensified overnight, culminating in Vice President Pence being dubbed a 'political dummy' at which point the writing ought to have been on the wall. Nonetheless market reaction betrayed surprise. Session lows were seen almost immediately across Wall Street, Frankfurt, London, Treasury yields, whilst spot gold spiked to an eight-session high and benchmark bund yields hit a four-and-a-half-month peak."

Gold rallied firmly thanks to safe haven demand, rising to $1307, the yield on the 10-year US Treasury bond sank below 3%.

In company specific news, oil giants BP and Royal Dutch Shell were a weight on the index as crude prices dipped.

Stocks going ex-dividend took 3.25 points off the FTSE 100 and 15.5 points off the 250, with affected companies including Bellway, Bunzl, Carnival, Countryside Properties, Diploma, Euromoney, Brewin Dolphin, Marston's, Soco, Tritax Big Box, Whitbread and Morrisons.

Hospital owner Mediclinic tumbled as sizeable Swiss write-downs led to paper losses but underlying earnings rose 3%. Management again flagged a tough outlook for Switzerland and flat Middle East margins.

Water company United Utilities gushed lower after it posted a drop in full-year pre-tax profit, although revenue edged higher. In the year to the end of March, pre-tax profit fell to £432.1m from £442.4m the year before, a drop the company attributed in part to the disposal of its non-household business a year earlier.

Paragon Banking slumped as its first-half numbers missed expectations, while brick maker Ibstock lost ground as it said the start of its financial year was slower than expected as it took a hit from extreme late-winter weather.

Private healthcare provider Spire Healthcare was in the red as it said it remained confident of hitting full-year targets even though market conditions throughout the start of its trading year were challenging.

Going the right way, B&Q and Screwfix owner Kingfisher shares climbed despite saying that sales were hammered by the bad weather in February and March, with like-for-like sales down 4%. But management expressed confidence about the underlying turnaround of the business.

Intertek was the standout gainer after the testing company posted 4.4% growth in revenue for the first four months of the year and said it was on track to deliver its 2018 targets.

Paddy Power Betfair was also a high riser after confirming late on Wednesday that it has agreed to merge its US business with US fantasy sports betting site Fan Duel.

Electrocomponents surged after it reported a 35% jump in full-year adjusted pre-tax profit and announced the acquisition of IESA for £88m.

TalkTalk was on the up after announcing the sale of its B2B business for £175m, as well as reporting a pre-tax loss of £73m for the year to the end of March compared with a £70m profit a year earlier. Headline earnings dropped to £233m from £361m in line with consensus.

Meanwhile Tate & Lyle rallied after saying its full-year profits rose by nearly a quarter, although sales slipped.

Budget airline Wizz flew higher after it said annual profit rose 22% and passenger numbers grew 25%, while Renewi shot higher as the waste-to-product company reported a doubling of full-year pre-tax profit.

Transport operator Go-Ahead pushed higher after saying it was confident of delivering full-year results "slightly ahead" of its previous expectations and Capital & Counties gained on the back of the unveiling of a potential demerger that would create two separately-listed businesses based around its Covent Garden and Earls Court estates.

In broker note action, Bakkavor was cut to 'hold' at HSBC, while AB Foods and Bunzl were both downgraded to 'neutral' at Goldman Sachs. Drinks maker Britvic was lifted to 'buy' at Societe Generale a day after well-received results.

Market Movers

FTSE 100 (UKX) 7,716.74 -0.92%
FTSE 250 (MCX) 20,989.49 -0.07%
techMARK (TASX) 3,530.27 -0.12%

FTSE 100 - Risers

Intertek Group (ITRK) 5,350.00p 3.40%
Paddy Power Betfair (PPB) 8,855.00p 2.61%
Smith & Nephew (SN.) 1,347.00p 1.58%
Diageo (DGE) 2,745.50p 1.38%
Randgold Resources Ltd. (RRS) 5,796.00p 1.36%
Croda International (CRDA) 4,788.00p 1.12%
St James's Place (STJ) 1,213.00p 1.08%
Coca-Cola HBC AG (CDI) (CCH) 2,636.00p 1.03%
Compass Group (CPG) 1,614.00p 0.97%
British American Tobacco (BATS) 3,800.00p 0.96%

FTSE 100 - Fallers

Mediclinic International (MDC) 616.40p -9.30%
Morrison (Wm) Supermarkets (MRW) 245.20p -3.62%
3i Group (III) 985.40p -2.82%
Micro Focus International (MCRO) 1,326.50p -2.32%
Severn Trent (SVT) 2,030.00p -2.31%
WPP (WPP) 1,273.00p -2.26%
Royal Dutch Shell 'B' (RDSB) 2,677.00p -2.25%
Centrica (CNA) 144.55p -2.03%
Imperial Brands (IMB) 2,761.00p -1.99%
Old Mutual (OML) 244.70p -1.96%

FTSE 250 - Risers

Electrocomponents (ECM) 730.00p 16.17%
Renewi (RWI) 77.40p 8.10%
Tate & Lyle (TATE) 653.60p 7.32%
QinetiQ Group (QQ.) 257.40p 5.02%
Greencore Group (GNC) 183.50p 4.86%
Babcock International Group (BAB) 809.20p 3.21%
TI Fluid Systems (TIFS) 262.00p 3.15%
Dairy Crest Group (DCG) 510.00p 3.03%
Cranswick (CWK) 3,296.00p 2.87%
Senior (SNR) 318.20p 2.71%

FTSE 250 - Fallers

Paragon Banking Group (PAG) 508.00p -8.05%
Tullow Oil (TLW) 244.40p -5.60%
Ibstock (IBST) 278.00p -4.99%
Pets at Home Group (PETS) 129.90p -4.77%
Spire Healthcare Group (SPI) 243.40p -4.62%
Cairn Energy (CNE) 237.20p -4.35%
Halfords Group (HFD) 326.60p -4.34%
Just Group (JUST) 143.70p -3.56%
McCarthy & Stone (MCS) 126.80p -3.50%
Bakkavor Group (BAKK) 194.00p -3.00%