London midday: FTSE slumps amid global selloff

There were heavy losses across the board in European equity markets on Thursday and London was no exception following a sharp selloff in the US and Asia amid worries about rising US interest rates.

The FTSE 100 was down 135 points or 1.9% to 7,010.13, holding above the 7,000 level for now but still at its worst levels since late March. Sterling was up 0.1% against the dollar at 1.3211 and 0.3% lower versus the euro at 1.1415.

Overnight, stocks on Wall Street saw their worst losses in eight months, with the Dow suffering its biggest daily decline of the year and the Nasdaq its worst day of trade since June as worries about rising bond yields, Sino-US trade tensions, relations between Italy and Europe and concerns about valuations heading into earnings season sparked heavy selling.

IG market analyst Joshua Mahony said: "Global markets have been in freefall, with sharp declines throughout the US yesterday providing a backdrop for huge losses throughout Asian and now European markets. At the heart of this issue is the rise in US 10-year treasury yields, with the huge US debt load looking increasingly vulnerable given the ramp up in servicing costs expected if yields continue to rise.

"Rising fears over continued growth in Italian debt given the fiscal expansion planned by their government means that eyes will also be trained on Italian yields, with the 10-year jumping from 3% to 3.5% in the past fortnight alone."

In a sharply weaker London market, precious metals miners bucked the trend, with Fresnillo, Randgold and Centamin all racking up strong gains as investors piled into the safety of gold.

Homewares retailer Dunelm also managed to defy the gloom, rising 5% after it said revenues had picked up to 4.2% on a like-for-like basis in the first quarter of its financial year after a finish to the previous period.

Paper and packaging group Mondi was resisting the sell-off as it said higher average selling prices, good cost containment and contributions from recent acquisitions boosted third quarter underlying profits.

Housebuilders were in the red, with Barratt Developments and Taylor Wimpey both lower after the latest survey from the Royal Institution of Chartered Surveyors showed UK house sales expectations over the next 12 months have turned negative. The survey also revealed that the balance of surveyors reporting that house prices have risen over the last three months fell to -2 in September from +1 in August, below consensus expectations of +2.

Barratt was also dented by the fact that its stock went ex-dividend.

Elsewhere, wealth manager Hargreaves Lansdown and housebuilding and urban regeneration company Countryside Properties slumped after trading updates.

Keller tumbled nearly 28% after issuing a profit warning on its Asia Pacific business, sparking a strategic review of the division. The construction engineer said the rest of its business was trading in line with expectations.

WH Smith was under the cosh after the retailer reported a drop in pre-tax profit for the year to the end of August and announced plans to restructure its high street business, while recruiter Hays tanked as it posted a slower quarterly fee growth rate.

Moneysupermarket slipped following its third-quarter update, while Jupiter Fund Management retreated as it posted a drop in third-quarter assets under management.

In broker note action, Auto Trader was lifted to ‘neutral’ by Macquarie while Gocompare.com was initiated at ‘outperform’.

Along with Barratt, Centrica, HSBC Holdings, Tesco, Close Brothers, OneSavings Bank, Primary Health Properties, Spectris, Spirax-Sarco Engineering, Superdry, Ted Baker and Weir Group were among the companies whose stock went ex-dividend.

Market Movers

FTSE 100 (UKX) 7,010.13 -1.90%
FTSE 250 (MCX) 18,831.38 -2.12%
techMARK (TASX) 3,264.94 -1.53%

FTSE 100 - Risers

Fresnillo (FRES) 811.00p 5.02%
Randgold Resources Ltd. (RRS) 5,484.65p 4.15%
Tesco (TSCO) 219.10p 1.34%
BT Group (BT.A) 238.85p 0.78%
Compass Group (CPG) 1,551.00p 0.52%
Vodafone Group (VOD) 153.58p 0.38%
Imperial Brands (IMB) 2,690.50p 0.34%
Morrison (Wm) Supermarkets (MRW) 247.20p 0.22%
Mondi (MNDI) 1,776.50p 0.06%
Sky (SKY) 1,726.50p 0.03%

FTSE 100 - Fallers

Barratt Developments (BDEV) 494.30p -10.97%
Hargreaves Lansdown (HL.) 1,828.50p -6.13%
Scottish Mortgage Inv Trust (SMT) 438.43p -5.79%
Evraz (EVR) 512.82p -4.00%
Melrose Industries (MRO) 167.43p -3.83%
Antofagasta (ANTO) 750.40p -3.75%
Centrica (CNA) 147.10p -3.64%
Taylor Wimpey (TW.) 159.05p -3.64%
Ashtead Group (AHT) 1,980.00p -3.60%
3i Group (III) 861.20p -3.52%

FTSE 250 - Risers

Centamin (DI) (CEY) 96.78p 6.35%
Dunelm Group (DNLM) 569.00p 4.88%
Hochschild Mining (HOC) 154.99p 3.95%
Polymetal International (POLY) 625.44p 2.73%
TI Fluid Systems (TIFS) 199.20p 2.15%
CLS Holdings (CLI) 222.00p 1.83%
Euromoney Institutional Investor (ERM) 1,360.00p 1.34%
Spire Healthcare Group (SPI) 127.80p 1.19%
Amigo Holdings (AMGO) 204.80p 1.19%
Greencore Group (GNC) 197.30p 0.92%

FTSE 250 - Fallers

Keller Group (KLR) 696.00p -27.65%
WH Smith (SMWH) 1,772.00p -12.88%
Hays (HAS) 157.10p -10.74%
Countryside Properties (CSP) 287.20p -9.23%
Premier Oil (PMO) 121.92p -8.13%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 318.00p -6.47%
Jupiter Fund Management (JUP) 353.80p -6.20%
Pagegroup (PAGE) 501.00p -6.00%
Polar Capital Technology Trust (PCT) 1,128.00p -6.00%
Jupiter European Opportunities Trust (JEO) 727.67p -5.86%