London midday: Weak economic data and earnings sink stocks

A wave of disappointing corporate updates and worse-than-expected data from the Eurozone pushed UK stocks firmly into the red on Tuesday, as concerns about the global economy continued to weigh on sentiment.

The FTSE 100 was down 0.7% at 6,322 by midday, as gains in the mining sector were offset by declines from the likes of Burberry, Hargreaves Lansdown, SABMiller, Michael Page and Mulberry.

The UK index has now fallen for five out for the past six sessions on the back of anxieties about a global economic slowdown and is trading at levels not seen since mid-2013. Meanwhile, fears about the spread of Ebola outside west Africa continues to erode risk appetite on the markets, after the news that a patient being treated in Germany has died.

"The fear surrounding the Ebloa crisis is spreading like wildfire, and traders won’t feel confident in equity markets until this issue is put to bed," said analyst David Madden from IG.

German economic sentiment fell more than expected in October, adding pressure on the European Central Bank to ramp up its efforts to address the weak recovery. The ZEW Center for European Economic Research index of investor and analyst expectations fell to -3.6 from 6.9 in September. Analysts had predicted a reading of 0.

Meanwhile, Eurozone industrial output dropped by 1.8% over the month of August, according to Eurostat, worse than the 1.6% decline expected by the market.

Investors were also reacting to data closer to home which showed that the annual rate of UK inflation slumped to a five-year low of 1.2% in September from 1.5% in August, the Office for National Statistics said. Economists had expected a reading of 1.4%. Investec analyst Victoria Clarke said that "the case for a near-term rate hike is becoming muddier".

Corporate updates disappoint

Burberry delivered double-digit underlying growth in the first half but shares in the high end fashion group slumped after the firm said that it has experienced a "more difficult external environment" with a softening in growth from Chinese consumers both home and when travelling.

Financial services group Hargreaves Lansdown disappointed despite reporting record assets under administration in the first quarter, as it said that investor confidence took a hit after the recent volatility across global markets.

Top line growth became flatter in the second quarter at SABMiller due to a decline in lager volumes and weakness in China and Australia, with results also likely to be hit by currency headwinds.

The share price of Michael Page International dived after the recruitment firm delivered a profit warning, saying that its full-year bottom line would be "modestly lower than consensus market expectations".

Similarly, luxury handbag maker Mulberry saw shares plummet after saying that trading conditions in the first half were "more difficult than expected" and that full-year profits would be significantly lower than market expectations.

On a positive note, mining stocks were performing well including Rio Tinto, Anglo American, BHP Billiton, Glencore and Fresnillo.

Oil and gas group Afren was a high riser after saying it has fired its chief executive officer Osman Shahenshah and chief operating officer Shahid Ullah for gross misconduct after an independent review found they had received unauthorised payments.

Supermarket group Tesco was hit by reports that it is set to suspend further staff in relation to the recent scandal over its accounting practices.

Market Movers
techMARK 2,648.25 -0.26%
FTSE 100 6,322.06 -0.69%
FTSE 250 14,502.69 -0.28%

FTSE 100 - Risers
Rio Tinto (RIO) 3,143.50p +1.73%
ARM Holdings (ARM) 834.00p +1.46%
Anglo American (AAL) 1,405.50p +1.26%
Fresnillo (FRES) 784.50p +0.77%
BHP Billiton (BLT) 1,673.00p +0.75%
Glencore (GLEN) 322.80p +0.69%
Mondi (MNDI) 972.50p +0.67%
Johnson Matthey (JMAT) 2,773.00p +0.65%
Rolls-Royce Holdings (RR.) 942.50p +0.59%
Weir Group (WEIR) 2,166.00p +0.51%

FTSE 100 - Fallers
Burberry Group (BRBY) 1,414.00p -4.39%
Hargreaves Lansdown (HL.) 850.50p -2.80%
easyJet (EZJ) 1,304.00p -2.69%
Standard Chartered (STAN) 1,075.50p -2.18%
Sainsbury (J) (SBRY) 224.00p -2.06%
InterContinental Hotels Group (IHG) 2,121.00p -2.03%
Tesco (TSCO) 177.00p -1.99%
Legal & General Group (LGEN) 218.70p -1.88%
Tullow Oil (TLW) 520.00p -1.79%
Aviva (AV.) 488.20p -1.77%

FTSE 250 - Risers
Ferrexpo (FXPO) 93.85p +3.64%
Bellway (BWY) 1,531.00p +3.24%
Oxford Instruments (OXIG) 994.00p +2.74%
Centamin (DI) (CEY) 57.95p +2.57%
Soco International (SIA) 340.60p +2.50%
Ophir Energy (OPHR) 195.00p +2.47%
Lonmin (LMI) 177.90p +2.24%
Brown (N.) Group (BWNG) 293.00p +2.23%
Just Retirement Group (JRG) 125.20p +2.04%
Taylor Wimpey (TW.) 110.20p +2.04%

FTSE 250 - Fallers
Michael Page International (MPI) 371.50p -10.61%
Balfour Beatty (BBY) 147.50p -4.03%
Hays (HAS) 115.00p -3.28%
Hellermanntyton Group (HTY) 282.80p -2.58%
Ashmore Group (ASHM) 294.10p -2.42%
DCC (DCC) 3,119.00p -2.26%
Close Brothers Group (CBG) 1,371.00p -2.21%
Hiscox Ltd (CDI) (HSX) 629.50p -2.18%
Countrywide (CWD) 454.90p -2.17%
Fisher (James) & Sons (FSJ) 1,190.00p -2.14%