London open: Stocks slump; AO World tumbles after update

London stocks slid in early trade on Friday, taking their cue from weak sessions in the US and Asia.

At 0850 BST, the FTSE 100 was down 0.8% at 7,028.32.

Richard Hunter, head of markets at Interactive Investor, said: "A sombre end to the quarter saw US indices recording their worst monthly performance in September since the outbreak of the pandemic.

"The litany of current woes which have beset investors continue to grow. Aside from the Federal Reserve tapering programme, further evidence of slowing growth in China and elevated inflation on both sides of the pond, additional concerns are appearing as the US considers its debt ceiling actions and whether to proceed with the President’s proposed (and significant) infrastructure spending plan.

"Deteriorating sentiment has unsurprisingly found its way to UK shores also, where the initial economic rebound from the pandemic lockdowns has somewhat run out of steam.

"With elevated inflation and supply chain issues also in evidence, the implication from the Bank of England that interest rates may be under consideration for a rise sooner rather than later added to the mixed picture on the immediate economic direction."

Worries about the energy crisis in China also weighed on investors’ minds after the country reportedly ordered state-owned firms to do whatever it takes to secure supplies for the winter.

In equity markets, pub chain JD Wetherspoon fell sharply after saying it had plunged to its worst full-year loss ever as revenues tumbled after its pubs were forced to shut due to Covid measures. In the year to 25 July, pre-tax losses widened to £154.7m from £34.1m the year before, with revenues down 38.8% to £772.6m.

Online electricals retailer AO World tanked after it said adjusted core earnings for the year were set to be between £35m and £50m, versus expectations of £54m, and warned that a shortage of delivery drivers was taking its toll. Currys shares also dropped.

Darktrace was under the cosh after shareholders KKR Dark Aggregator LP, Summit DT CLN Holdings 4 and Balderton Capital SFI SLP sold 25m shares in the company in a placing at 750p each.

Convenience food maker Greencore was in the red despite saying that adjusted annual profits would be at the upper end of guidance as it worked to mitigate supply-chain and labour issues in the UK caused by Brexit and the Covid pandemic.

Bucking the trend, education publisher Pearson rallied on the back of a positive research note by Citi, which said the recent selloff has created "an interesting valuation opportunity".

Euromoney gained after it said full-year adjusted pre-tax profit was set to be "significantly ahead" of analysts' expectations.

Market Movers

FTSE 100 (UKX) 7,028.32 -0.82%
FTSE 250 (MCX) 22,814.69 -0.94%
techMARK (TASX) 4,583.12 -0.91%

FTSE 100 - Risers

Pearson (PSON) 723.40p 1.63%
Unilever (ULVR) 4,036.00p 0.77%
Admiral Group (ADM) 3,128.00p 0.64%
Croda International (CRDA) 8,594.00p 0.59%
National Grid (NG.) 888.40p 0.43%
Severn Trent (SVT) 2,615.00p 0.42%
United Utilities Group (UU.) 971.80p 0.35%
Hargreaves Lansdown (HL.) 1,434.00p 0.17%
Meggitt (MGGT) 739.60p 0.16%
Morrison (Wm) Supermarkets (MRW) 294.90p 0.14%

FTSE 100 - Fallers

JD Sports Fashion (JD.) 996.00p -5.01%
Whitbread (WTB) 3,229.00p -2.62%
Melrose Industries (MRO) 169.85p -2.41%
Rolls-Royce Holdings (RR.) 136.76p -2.41%
Smith & Nephew (SN.) 1,256.00p -2.41%
Lloyds Banking Group (LLOY) 45.45p -2.39%
Informa (INF) 537.00p -2.26%
Kingfisher (KGF) 329.10p -2.20%
Barratt Developments (BDEV) 646.80p -2.06%
Evraz (EVR) 582.40p -2.02%

FTSE 250 - Risers

Euromoney Institutional Investor (ERM) 1,042.00p 2.56%
Centrica (CNA) 57.42p 1.31%
Pennon Group (PNN) 1,146.00p 1.15%
HGCapital Trust (HGT) 395.00p 1.02%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 461.50p 0.98%
Assura (AGR) 72.05p 0.70%
Diploma (DPLM) 2,860.00p 0.63%
Cairn Energy (CNE) 188.30p 0.43%
Domino's Pizza Group (DOM) 397.80p 0.40%
JPMorgan European Discovery Trust (JEDT) 512.00p 0.39%

FTSE 250 - Fallers

AO World (AO.) 184.10p -15.32%
Currys (CURY) 122.00p -8.61%
Darktrace (DARK) 754.00p -8.05%
Wetherspoon (J.D.) (JDW) 993.50p -4.75%
Virgin Money UK (VMUK) 197.75p -3.25%
Restaurant Group (RTN) 100.00p -2.91%
Elementis (ELM) 144.80p -2.82%
Marks & Spencer Group (MKS) 178.40p -2.78%
Dr. Martens (DOCS) 383.20p -2.74%
Carnival (CCL) 1,639.00p -2.56%