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FTSE100 suffers triple digit loss

The FTSE100 ended the day around 130 points lower at 5,944, tumbling below 6,000.
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London’s blue-chip stocks ended the day down by more than one hundred points

London’s blue-chip stocks ended the day down by more than one hundred points as spooked investors steered clear of risk following another trading suspension in China.

Global equities saw heavy declines on Thursday in what has been one of the worst opening weeks of the year for stock markets in recent memory.

Overnight, Chinese trading was halted again amid fears about the country's currency, sending global markets into a tailspin.

However, not everyone saw it as a problem, with Jasper Lawler at CMC Markets saying: “While it’s disturbing that Chinese authorities don’t appear to have a grip over the regulation of the domestic stock market, it’s not necessarily a problem for US and European markets.”

Chinese shares had plummeted as jitters engulfed markets about the speed in which the yuan (CNY) is devaluing.

This is the bigger source of uncertainty for Europe, Lawler said.

“A slower pace of yuan devaluation would at least give investors and European exporters a chance to adjust to the new normal,” he added.

Global markets were no better than in the UK, with US markets resembling opening glum, glum and glummer.

The Dow Jones Industrial Average opened Thursday at 16,719, down 188 points, while the broader-based S&P 500 shed 23 points at 1,967. The Nasdaq Composite lost 76 points to open at 4,760.

In Europe, the French Cac40 dropped 78 points, or 1.7%, to 4,402 while the German Dax lost more than 2% to 9,985.

In the UK, the FTSE100 ended the day around 130 points lower at 5,944, tumbling below 6,000.

Miners have taken a hammering in the past year, and found themselves at the foot of the much maligned FTSE100 again on Thursday.

Anglo American (LON) was the index’s big loser, plummeting 11% to 240p, while Glencore (LON:GLEN) dropped more than 8% to around 78p.

Elsewhere, Home Retail (LON:HOME) was among the few risers, up more than 3p to 136p, on rumours that former Tesco (LON:TSCO) boss Terry Leahy was planning a private equity-backed bid for the Argos owner.

Reports suggested Leahy was considering teaming up with US private equity firm Clayton Dubilier & Rice to rival an approach to Home Retail by Sainsbury's (LON:SBRY).

Away from the index there was better news, with Greenko (LON:GKO) up 35% to 2.5p.

Directors agreed to issue and allot 159mln shares to shareholders by way of an initial cash return.

Elsewhere, Hydrodec (LON:HYR) jumped 31.8% to 3.6p as the industrial oil refining group said the oil produced from its recently rebuilt Canton re-refinery in Ohio has achieved '500hr' oil status.

This means the oil is of high enough quality to access the larger power transformer market.

Also higher was Provexis (LON:PXS), which climbed around 11.1% to 0.3p.

The nutrition company said two board members, finance director Ian Ford and chairman Dawson Buck, bought a total of 4.9mln shares.

Conversely, Cluff Natural Resources (LON:CLNR) lost around 11.5% to 2.88p. as the firm has now stopped all expenditure on the UK's first deep offshore underground coal gasification (UCG) plant at Kincardine in Fife, after plans were put on hold last year.

Also lower was Golden Saint Resources (LON:GSR) after the company said its efforts to raise around £250,000 through the crowdfunding site crowdforangels has been axed after it failed to meet the required £50,000 threshold. Shares fell 9% to 0.02p.

LUNCHTIME REPORT

Blue-chip shares plunged on Thursday despite talk that former Tesco boss Terry Leahy may team up with private equity investors to bid for Home Retail.

The FTSE 100 Index dropped 156 points to 5916, which analysts said was around 100 points away from lows not seen since after Black Monday in August last year.

Commodities led the decline as oil prices slumped, with Brent crude falling 3.4% to US$33.1 and US light crude off 3.8% at US$32.7.

Another Chinese trading halt triggered the losses as the yuan fell near to five-year lows, while Middle East tensions also contributed.

The pound hit a five-year low, with traders blaming growing worries that the UK could quit the EU in the referendum planned by the Tory government.

Home Retail (LON:HOME) was among the few risers, up 3p to 135.4p, on rumours that former Tesco (LON:TSCO) boss Terry Leahy was planning a private equity-backed bid for the Argos owner.

Reports suggested Leahy was considering teaming up with US private equity firm Clayton Dubilier & Rice to rival an approach to Home Retail by Sainsbury's (LON:SBRY).

But news elsewhere in retail was negative, with discounter Poundland (LON:PLND) shedding 12% to 168.7p after saying annual profits would be at the low end of hopes.

Marks & Spencer (LON:MKS) was 6p off at 432.7p on predictable news that food sales did well over Christmas, clothing did badly and boss Marc Bolland had decided to quit.

Mobile Streams (LON:MOS) reversed 19% to 6.5p as the company warned the devaluation of the Argentine peso would hit revenue and profit.

Record (LON:REC) backtracked 10.9% to 24.5p. The firm said a dynamic hedging mandate it won in September worth around US$500mln has been suspended due to a potential restructuring.

Laser technology company Somero Enterprises (LON:SOM) rose 12.2% to 133p as the company forecasted annual revenue ahead of market expectations.

Penna Consulting (LON:PNA) lifted 8% to 305p on an upbeat statement, with the recruitment company saying it will beat market hopes for the year on the back of an improved third quarter.

LONDON OPEN

London shares took another hammering on Thursday as Chinese trading was halted again amid fears about the country's currency.

The FTSE 100 Index plunged 164 points to 5908 after China's market regulators ended trading after just 30 minutes.

Chinese shares had plummeted as jitters engulfed markets about the speed in which the yuan (CNY) is devaluing.

USD/CNY was trading at 6.59 early Thursday, from Wednesday’s close of 6.55.

Rabobank market analysts said concerns were rising that the Chinese authorities were losing their grip on markets and on confidence at large

They said in a note: "The drop in the CNY since the end of 2015 is still about half what we saw in early August 2015, which ultimately led to August 24’s ‘Black Monday', but the dynamics are worrisome."

Downbeat equity news failed to provide a boost, with Poundland (LON:PLND) losing 10% of its value to 172.8p after an effective profit warning.

Marks & Spencer (LON:MKS) was one of the few risers, up 1% at 443.1p, on predictable news that food sales did well over Christmas, clothing did badly and chief executive Marc Bolland had decided to quit.

Laser technology company Somero Enterprises (LON:SOM) rose 10.5% to 131p as a revenue and earnings upgrade from the company, which it now reckons will be ahead of market expectations, helped shares this morning.

Penna Consulting (LON:PNA) lifted 9.5% to 309p on an upbeat statement, with the recruitment company saying it will beat market hopes for the year on the back of an improved third quarter.

MARKET OPEN

London’s FTSE 100 is expected to take another leg down, to mark a fourth consecutive fall since the New Year.

The rout in equity markets continues. It comes amid fears over North Korea, Chinese economics, anticipation of America’s next interest rate rise, and ever weaker oil prices.

In the past 24 hours, crude has shed a further 10% to trade beneath US$33 per barrel.

Last night Wall Street saw further declines, with the Dow Jones giving up 252 points, 1.47%, while the S&P 500 and Nasdaq dropped 1.3% and 1.1% respectively.

“So far it’s been a week to forget as we start the New Year, and the old saying of so goes January, so goes the year is already being let out for air as investors speculate on what to expect for stock markets through the rest of 2016,” said Michael Hewson, analyst at CMC Markets.

In Asia, where China’s Yuan continues to devalue sharply, the Shanghai Composite moved 7.3% lower to around 3,115.

Hong Kong’s Hang Seng fell 3% to 20,340 while Japan’s Nikkei pulled back 2.3% to 17,767.

Australia’s ASX 200 meanwhile lost just over 2% to 5,010.

Here in the UK, spread-betting and CFD group IG Markets is calling the FTSE 100 some 120 points lower, at 5,944 to 5,948.

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