London open: Stocks fall amid Turkey contagion concerns

London stocks fell in early trade on Monday amid growing concerns about the crisis in Turkey and the potential for contagion.

At 0830 BST, the FTSE 100 was down 0.4% to 7,633.88, while the pound was down 0.1% against the dollar at 1.2744 and up 0.1% versus the euro at 1.1195.

"After a tumultuous session on Friday, investors had been hoping to wake up to better news from Asia and a positive start to the week, but markets are continuing to fall," said Rebecca O’Keeffe, head of investment at Interactive Investor. "Turkey remains front and centre of concerns, but contagion is rapidly undermining other emerging market currencies across Asia, Africa and Latin America, many of which are now under significant pressure. In Europe, the contagious effect of the turmoil is taking its toll on the banking sector in particular and commodities are also suffering.

She added that President Erdogan's failure to allow an independent central bank has put him in direct conflict with global financial markets. "You cannot run large fiscal and current account deficits if you have made your country uninvestable for foreign capital, and President Trump’s tariffs on Turkish steel and aluminium are merely helping to hasten the inevitable. While Erdogan remains intransigent, it is difficult to see international investors returning to Turkey any time soon."

Measures announced by Turkey’s central bank, including a pledge to provide "all the liquidity the banks need" to ensure stability, did little to assuage investors. Domestic banks will also be able to borrow foreign-exchange deposits from the central bank at a one-month maturity and one-week maturities.

The lira’s plunge continued, however, with the currency hitting a new record low in early Asian trading. The dollar was up almost 8% to TL 6.9362.

In corporate news, shipping services company Clarkson rallied as it posted a drop in interim profits due a tough first quarter and a weaker dollar, but said conditions picked up in the second quarter.

Wealth manager Brewin Dolphin lost ground as it announced the appointment of Siobhan Boylan - the current chief financial officer of Legal & General Investment - to the board as finance director.

Shire was little changed after partner Shionogi applied to expand the use in Japan of co-developed drug Intuniv to treat adults for attention deficit hyperactivity disorder.

Esure was on the front foot ahead of its earnings on Tuesday, while emerging markets-focused asset manager Ashmore slumped as Turkey woes spread.

Outside the FTSE 350, Chemring tumbled nearly 22% after warning that a fatal explosion at its Countermeasures facility near Salisbury will reduce underlying operating profit for the year by between £10m and £20m.

Online trading platform Plus500 slid after it reported a surge in first-half earnings as geopolitical events led to higher-than-expected market volatility, but cautioned that the performance was unlikely to be repeated in the second half.

On the broker note front, Meggitt was cut to ‘equalweight’ at Barclays, but BAE was upgraded to ‘overweight’ at Morgan Stanley and Clarkson was lifted to ‘buy’ at Liberum.

Paddy Power was downgraded to ‘sell’ at Citi and Ryanair was cut to ‘reduce’ at AlphaValue.

Market Movers

FTSE 100 (UKX) 7,633.88 -0.43%
FTSE 250 (MCX) 20,570.33 -0.47%
techMARK (TASX) 3,559.24 -0.50%

FTSE 100 - Risers

BAE Systems (BA.) 638.60p 2.08%
Direct Line Insurance Group (DLG) 324.00p 0.47%
British American Tobacco (BATS) 4,166.00p 0.28%
BP (BP.) 557.40p 0.25%
United Utilities Group (UU.) 739.00p 0.11%
Burberry Group (BRBY) 2,221.00p 0.09%
Ferguson (FERG) 6,156.00p 0.02%
Smurfit Kappa Group (SKG) 3,257.84p -0.00%
Associated British Foods (ABF) 2,404.00p -0.04%
Admiral Group (ADM) 1,986.00p -0.05%

FTSE 100 - Fallers

TUI AG Reg Shs (DI) (TUI) 1,506.00p -3.80%
Evraz (EVR) 495.20p -2.90%
Paddy Power Betfair (PPB) 7,080.00p -2.41%
Anglo American (AAL) 1,642.20p -1.52%
AstraZeneca (AZN) 6,018.00p -1.46%
WPP (WPP) 1,220.00p -1.21%
Mondi (MNDI) 2,146.00p -1.20%
BHP Billiton (BLT) 1,676.20p -1.17%
NMC Health (NMC) 3,966.00p -1.15%
Prudential (PRU) 1,778.00p -1.08%

FTSE 250 - Risers

esure Group (ESUR) 215.00p 5.39%
Clarkson (CKN) 2,701.60p 4.51%
Fisher (James) & Sons (FSJ) 1,850.00p 2.55%
Daejan Holdings (DJAN) 6,150.00p 1.49%
IP Group (IPO) 123.40p 1.48%
Charter Court Financial Services Group (CCFS) 349.00p 1.45%
RHI Magnesita N.V. (DI) (RHIM) 5,035.00p 1.23%
Card Factory (CARD) 189.50p 1.17%
Alfa Financial Software Holdings (ALFA) 168.00p 1.08%
Energean Oil & Gas (ENOG) 521.25p 1.02%

FTSE 250 - Fallers

Ashmore Group (ASHM) 339.80p -4.82%
Brewin Dolphin Holdings (BRW) 351.00p -2.34%
Mediclinic International (MDC) 478.40p -2.27%
Investec (INVP) 510.80p -2.15%
Kaz Minerals (KAZ) 600.20p -1.99%
Just Group (JUST) 98.60p -1.99%
Bank of Georgia Group (BGEO) 1,676.35p -1.98%
Wetherspoon (J.D.) (JDW) 1,238.00p -1.82%
Polymetal International (POLY) 642.40p -1.80%
Keller Group (KLR) 1,020.00p -1.73%