London midday: Stocks turn lower as energy sector takes a hit

London stocks had fallen firmly into the red by midday as weaker oil prices weighed on the energy sector and the pound strengthened, with Hargreaves Lansdown leading the fallers after a report from the City watchdog.

The FTSE 100 was down 0.7% to 7,607.46, as the pound was up 0.3% against the dollar at 1.3262 and flat versus the euro at 1.1327. 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 leaked lower as Brent crude slid 1.9% to $73.95 a barrel and West Texas Intermediate declined 1.6% to $69.87.

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.

Back in the UK, the Taxation Bill was due to return to the House of Commons on Monday, while the Trade Bill returns on Tuesday as Downing Street ruled out a second referendum on Brexit under "any circumstances", after former education secretary Justine Greening called for a follow-up poll in an article in The Times.

Neil Wilson, chief 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.

Investors were looking ahead to a summit in Helsinki that was beginning around noon between US and Russian leaders Donald Trump and Vladimir Putin. The two leaders are due to meet one-on-one in what will be the first ever official summit between the two. It comes after 12 Russian agents were indicted in the Mueller investigation and following clashes between Trump and his Nato allies last week in Brussels over defence spending policies.

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 under the cosh following a downgrade to 'hold' at HSBC.

Market Movers

FTSE 100 (UKX) 7,607.46 -0.71%
FTSE 250 (MCX) 20,874.30 0.29%
techMARK (TASX) 3,564.13 -0.36%

FTSE 100 - Risers

Just Eat (JE.) 846.20p 0.69%
CRH (CRH) 2,707.50p 0.61%
Smiths Group (SMIN) 1,744.50p 0.55%
BAE Systems (BA.) 674.40p 0.45%
Standard Chartered (STAN) 673.80p 0.42%
Barclays (BARC) 190.46p 0.41%
Johnson Matthey (JMAT) 3,680.00p 0.41%
Rightmove (RMV) 5,124.00p 0.35%
Ocado Group (OCDO) 1,032.50p 0.29%
Mondi (MNDI) 2,033.67p 0.23%

FTSE 100 - Fallers

Hargreaves Lansdown (HL.) 1,974.00p -4.04%
Micro Focus International (MCRO) 1,230.50p -3.75%
United Utilities Group (UU.) 718.00p -2.18%
WPP (WPP) 1,218.00p -2.17%
Severn Trent (SVT) 1,904.54p -1.88%
Admiral Group (ADM) 1,914.50p -1.72%
Next (NXT) 6,002.00p -1.70%
Standard Life Aberdeen (SLA) 307.40p -1.66%
Glencore (GLEN) 308.35p -1.49%
British American Tobacco (BATS) 3,867.50p -1.48%

FTSE 250 - Risers

Indivior (INDV) 363.30p 24.76%
John Laing Infrastructure Fund Ltd (JLIF) 140.30p 18.70%
HICL Infrastructure Company Ltd (HICL) 153.18p 5.86%
Clarkson (CKN) 2,490.00p 5.29%
International Public Partnerships Ltd. (INPP) 148.60p 4.35%
Fisher (James) & Sons (FSJ) 1,890.00p 3.62%
Elementis (ELM) 262.40p 3.39%
Rank Group (RNK) 182.00p 3.17%
John Laing Group (JLG) 280.00p 2.49%
Contour Global (GLO) 252.00p 2.44%

FTSE 250 - Fallers

Go-Ahead Group (GOG) 1,421.08p -7.06%
AA (AA.) 119.40p -3.98%
TalkTalk Telecom Group (TALK) 109.04p -2.90%
Dixons Carphone (DC.) 185.10p -2.63%
Dunelm Group (DNLM) 507.50p -2.59%
Premier Oil (PMO) 131.50p -2.52%
Stagecoach Group (SGC) 157.00p -2.18%
BCA Marketplace (BCA) 226.00p -2.16%
IP Group (IPO) 134.40p -1.90%
Inmarsat (ISAT) 519.40p -1.81%