London shares closed lower on Tuesday after a session where it only briefly rose on the day.
The blue-chip FTSE 100 index closed down 0.78% at 6,826 after a combination of weaker oil prices and financial services group bled value after brokers at Barclays cut ratings on brethren Standard Chartered Bank (LON:STAN), making the Asia-focused bank the top faller of 3% to 639p.
Barclays lowered its stance on Standard Chartered from ‘equal weight’ to ‘underweight’, while lifting its price target on the shares from 500p to 520p. The analysts argue that SCB’s stock valuation is overshooting its earnings power, but have also pointed to management’s actions which have stabilised the business.
The second-biggest faller was Lloyds Banking Group (LON:LLOY), down 2.6% to 58.08p, and other banks in the top ten fallers included HSBC Holdings (LONL:HSBA) down 2.3% to 568.5p, Barclays (LON:BARC) down 2.1% to 169.7p and insurer Standard Life (LON:SL) down 1.7% to 361.9p.
With Brent crude down 1.6% to $46.85 it was no surprise that energy stocks dropped too. Royal Dutch Shell (LON:RDSB) shares were down 1.7% to 1,938.5p, while BP (LON:BP) were down 1.6% to 427.65p.
The mid-cap FTSE 250 ended down 0.1% at 18,003 – holding onto the 18000 level, just. Its performance was better than the blue-chips. For most of the session the mid-caps managed to remain in positive territory but eventually were dragged lower by the general mood of the bourse.
The FTSE AIM 100 Index ended 0.4% higher at 3,786 while the FTSE AIM All-Share Index ended up 0.3% at 797.
But it was not all doom and gloom. Brokers at Morgan Stanley and Credit Suisse both scrapped their forecasts that the UK will slip into recession in the wake of the Brexit vote, as a slew of surprisingly decent economic data brightened the outlook for post-referendum Britain.
Among stocks, housebuilders gained on Tuesday.
Shares in house builder Berkeley (LON:BKG) remained the top performer on the FTSE 100 with a 3.5% gain to 2,783p. Investors were encouraged by its full-year results.
Berkeley said there had been a rise in customers cancelling reservations for new homes after the Brexit vote, but that had now returned to normal. It added that property prices remained "resilient".
Meanwhile Redrow (LON:RDW), Wales' biggest house builder, said pre-tax profits had risen 23% to £250m. Redrow shares closed up 8.1% at 415.52p.
Midafternoon
The FTSE 100 was firmly in negative territory in afternoon share trading despite a mildly positive start to the day.
Standing at 6,847 the benchmark was down 48 points, 0.70%.
London’s weakness comes despite a slightly better open for Wall Street – where the Dow Jones is up 0.2%, while the S&P 500 and Nasdaq also rose.
Perhaps unsurprisingly much of the losses were led by oil and gas companies, as crude oil backed off a further 2.5%. In London trading Brent crude was changing hands at US$46.47, while West Texas Intermediary futures were priced just above US$46 per barrel.
Royal Dutch Shell and BP both fell around 1.8%, to 1,935p and 426.6p respectively.
FTSE 100 lower in London, housebuilders rally as they shrug off Brexit - 10:00am
The FTSE 100 was in the red on Tuesday, though London’s seemingly unshakable housebuilders were the top performing stocks.
Positive financial results and a cautious ‘better-than-feared’ outlook post-brexit vote have given the building a sector a lift.
Redrow plc (LON:RDW) rose 8% this morning, to change hands at 415p per share. There was scarce mention of Brexit directly in the housebuilders financial results, for the year ended June 30, though it told investors it was expecting “an excellent year” and reported a 23% rise in profits.
Such is its confidence, Redrow proposed a 67% increase to its full year dividend, which will be 10p per share for 2016.
Berkeley Group Holdings Plc (LON:BKG), up 3.7%, meanwhile, reassured that the numbers of cancelled house reservations – which had spiked after the referendum result – had returned to normal levels.
Elsewhere in the sector Bellway Plc (LON:BWY) and Bovis Homes Group Plc (LON:BVS) followed, rising 2.5% and 1.8%, whilst Persimmon Plc (LON:PSN), Taylor Wimpey Plc (LON:TW. and Barratt Developments Plc (LON:BDEV) all rose between 1.3% and 1.5% in early deals.
Sports Direct International Plc (LON:SPD) was another notable mover, gaining 4.1% after holding its hands up to "serious shortcomings" in its employment practices and is announced it would be replacing so-called ‘zero-hour’ contracts for staff.
Financial services stocks were lit up in red, meanwhile, with Asia focussed banking group Standard Chartered PLC (LON:STAN) down 1.9%, whilst Provident Financial Plc (LON:PFG) and Schroders Plc (LON:SDR) were also notable fallers among London’s top 100 shares.
At 6,860 at around 10:00am the FTSE 100 was down 19 points, 0.28%.
Small caps fared better, with the FTSE AIM 10 up around 12 points, 0.38%, at 3,785, whilst the index for the junior market’s top 50 stocks did slightly better.
Risers and fallers: Ceres Power, Mobile Streams and Forbidden Technologies https://t.co/RmSXrPWouf via @proactive_uk
— Proactive News Desk (@UK_Proactive) September 6, 2016
FTSE 100 up 6 points as US traders get back to work - 8:15am
The FTSE 100 was up 6 points at open this morning to 6,885.
The top winner was Mediclinic International (LON:ANH) up 2% to 1,051p.
Standard Chartered (LON:STAN) was the biggest loser, down 1% to 652p.
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FTSE 100 called higher ahead of Tuesday’s open as US traders get back to work - 6:55am
London’s FTSE 100 is seen slightly higher on Tuesday, with attentions remaining on macroeconomics and statistics.
With US markets shut yesterday stock market soothsayers have less to go on this morning, other than expectations that volumes will be higher as American investors get back to work.
Could it be that a jolt of volumes can help change the current stock market trading patterns?
“The absence of US investors made for quiet trading in European stock markets on Monday so their return on Tuesday could see markets try to break recent ranges,” said Jasper Lawler, analyst at CMC Markets.
“The FTSE 100 has been capped for 6900 for the last three weeks.”
Oil prices were a key factor on Monday, with OPEC and Russia’s collaboration among the key features on a volatile trading day. It will likely be a focus for investors on Tuesday as well.
In Asia, the major benchmarks were in plus territory today. Japan’s Nikkei made slight gains, rising 0.3% to 17,089. Hong Kong’s Hang Seng and the Shanghai Composite were up 0.45% and 0.47% to 23,760 and 3,086 respectively.
Here in London, spreadbetting and CFD group IG Markets is calling the FTSE 100 up 14 points, with the blue chip benchmark seen at 6,894 to 6,898 about an hour before the start of trading.