London midday: Surprise Swiss policy move sinks stocks, FTSE near one-month low
Markets were back in the red by Thursday lunchtime, erasing earlier gains after a surprise announcement by the Swiss central bank.
The FTSE 100, which rebounded to an intraday high of 6,472.91 early on, was down 0.6% at 6,349 by midday after Switzerland scrapping the franc’s minimum exchange rate against the euro and lowered interest rates.
“The Swiss are known for their neutrality, but today’s move by the Swiss National Bank is far from neutral,” said analyst David Madden from IG.
“The sudden abandonment of the floor by the Swiss central bank has sent the markets into a tailspin. Equity markets have been shaken out by the Swiss move, and dealers are seeking the safety of the US dollar,” he said.
The drop into negative territory puts the Footsie on track for its lowest close in nearly a month; it has not settled below this mark since 17 December when it finished the day at 6,336.48.
The FTSE 100 had plunged 2.4% on Wednesday as a sinking copper price and concerns about global growth hammered sentiment, along with disappointing US retail sales data and weak results from American banking giant JPMorgan Chase & Co.
On Thursday, not even the news that Germany's economy grew at the strongest rate in three years in 2014 could brighten the mood across European markets. The Federal Statistics Office said gross domestic product rose 1.5% compared to a 0.1% increase in 2013.
Experian and ABF on the rise, Tullow slips after positive start
Third-quarter organic revenue was flat at information services group Experian, but weakness in some divisions was offset by a strong performance in the core credit services unit, causing shares to rise.
Associated British Foods warned that full-year earnings would be hit by a large profit reduction at its sugar business and the strength of sterling. However, the stock was in demand after Primark, the main driver of growth at the retail and food ingredients group, recovered strongly after a slow autumn.
Tullow Oil, which was among the top performers in early deals on Thursday, dropped into the red as investors digested an trading update that showed the company was taking billions of dollars-worth of write-offs and impairment charges. The group also said profits more than halved last year due to the collapse in crude prices, as it lowered its exploration budget for 2015.
Gold mining stocks were performing well after UBS said they are “well-placed to benefit from FX and oil weakness” compared with their industrial metal peers. Randgold Resources, Fresnillo and Polymetal were rising, along with Centamin as it appointed a new chief executive.
A number of stocks were trading lower after going ex-dividend, including Next, Imperial Tobacco and Poundland.
techMARK 2,931.51 -0.94%
FTSE 100 6,348.88 -0.62%
FTSE 250 15,755.11 -0.74%
FTSE 100 - Risers
Randgold Resources Ltd. (RRS) 5,165.00p +4.34%
Fresnillo (FRES) 848.00p +3.92%
Experian (EXPN) 1,099.00p +3.19%
BHP Billiton (BLT) 1,315.00p +2.33%
Sainsbury (J) (SBRY) 248.00p +2.02%
Morrison (Wm) Supermarkets (MRW) 182.70p +2.01%
BG Group (BG.) 807.50p +1.61%
Associated British Foods (ABF) 3,061.00p +0.86%
easyJet (EZJ) 1,633.00p +0.86%
International Consolidated Airlines Group SA (CDI) (IAG) 487.80p +0.79%
FTSE 100 - Fallers
Dixons Carphone (DC.) 425.80p -4.10%
Imperial Tobacco Group (IMT) 2,820.00p -3.82%
Kingfisher (KGF) 319.50p -2.95%
Persimmon (PSN) 1,425.00p -2.93%
Compass Group (CPG) 1,075.00p -2.71%
Reed Elsevier (REL) 1,077.00p -2.45%
Marks & Spencer Group (MKS) 441.00p -2.28%
CRH (CRH) 1,456.00p -2.02%
InterContinental Hotels Group (IHG) 2,564.00p -1.99%
GlaxoSmithKline (GSK) 1,368.50p -1.93%
FTSE 250 - Risers
Polymetal International (POLY) 576.00p +6.77%
Premier Oil (PMO) 140.00p +6.06%
Acacia Mining (ACA) 300.30p +5.00%
Savills (SVS) 682.50p +4.68%
Game Digital (GMD) 252.00p +4.13%
Lonmin (LMI) 173.10p +3.65%
Soco International (SIA) 257.60p +2.88%
Afren (AFR) 22.21p +2.16%
Centamin (DI) (CEY) 67.30p +1.89%
Serco Group (SRP) 156.80p +1.88%
FTSE 250 - Fallers
Home Retail Group (HOME) 196.50p -7.31%
Spire Healthcare Group (SPI) 318.50p -6.27%
Booker Group (BOK) 152.70p -6.09%
Hikma Pharmaceuticals (HIK) 2,226.00p -5.96%
Bovis Homes Group (BVS) 773.50p -5.61%
Kaz Minerals (KAZ) 162.20p -4.81%
Man Group (EMG) 153.90p -4.71%
IP Group (IPO) 217.70p -4.10%
Domino's Pizza Group (DOM) 667.50p -3.96%
Vedanta Resources (VED) 392.50p -3.85%