FTSE 100 closes lower
US stocks down
Miners pull back
FTSE 100, along with global equities, tracked lower on Monday, closing down over 85 points at 7,233.
The FTSE 250 index also lost ground, falling almost 272 points lower at 19,646.
In the currcency markets, sterling was around flat against the Euro and down 0.43% against the US dollar.
Fiona Cincotta, the senior market analyst, at City Index, said Italy had once again become a focus for investors.
"With rumours that a Brexit deal could be only a couple of weeks away, traders have begun to see the Italian situation as potentially more problematic than the British one," she said.
"Italy’s new coalition government seems to be taking a page out of the Donald Trump playbook and issuing hysterical statements as part of a legitimate negotiating ploy.
"Joint deputy prime minister Matteo Salvini has been attacking EU officials and speculators today, accusing them undermining Italy’s economy even as his government seeks to come to some agreement on its budget with Brussels."
On Footsie, retailer Next (LON:NEXT) added 1.57% to 5,424p and was the top gainer.
On the downside, the biggest laggard was Melrose Industries (LON:MRO), whose shares fell 5.45% to 181.30p. The firm said it had appointed Liam Butterworth to head the automotive division that has been created following the hostile takeover of GKN PLC (LON:GKN).
The turnaround specialist—which bought GKN earlier this year for £8bn –said Butterworth would start as chief executive of the division, which includes GKN Driveline and the GKN ePowertrain businesses, in November.
15.30pm
British blue-chips were still wresting with losses in afternoon trade Monday, with Vodafone PLC a notable decliner, but stocks overall managed to come off session lows.
The FTSE 100 was down 52 points, or 0.7%, to 7,622, paring an intraday loss of 1%. The UK benchmark had been down by more as Wall Street opened in the red, including a loss of more than 100 points for the Dow Jones Industrial Average. But the Dow has since fought back to notch a minor gain.
Wall Street fell following a selloff in Chinese equities on Monday. Analysts said a rise in US Treasury yields as bond prices fall on concerns about higher interest rates has also pressured global equity markets.
Back in London, shares of Vodafone PLC weighed on the FTSE 100. The mobile phone services company slumped 3% to 155p as Jefferies reportedly cut its rating on the company to ‘hold’ from ‘buy’, saying Vodafone is likely to reduce the amount of its dividend as the company needs to focus on debt reduction.
1:15pm: FTSE 100 declines before US trading starts
UK stocks held to losses in Monday afternoon trade as Wall Street looked set to fall in the wake of the selloff in Chinese equities.
The FTSE 100 was down 43 points at 7,275. US stock futures indicated the Dow Jones Industrial Average was facing an 88-point decline when trading starts. Nasdaq-100 and S&P Index futures were each down 0.2%.
Wall Street steps back into action after Chinese stocks sank overnight following their closure last week for the Golden Week holiday. Investors there played catch-up after the US government ramped up its trade war with the world’s second-largest economy.
The Shanghai Composite slid 3.7% on Monday even as the People’s Bank of China said it's easing monetary policy in a bid to bolster growth.
“The decision from the Chinese central bank (PBoC) to reduce the amount of capital banks require to hold is expected to free up $109 billion for the economy,” said IG market analyst Joshua Mahony.
The move “also highlights the expectation of further economic suffering in the country, with the US-China trade war looking likely to rumble on for some time yet,” he added.
Mining stocks, which are heavily weighted on the FTSE 100 were mostly lower. Mining shares can be sensitive to developments in China. Shares of copper miner Antofagasta PLC (LON:ANTO) fell 1.6% to 825.40p, and Anglo American PLC (LON:AAL) gave up 1% at 1,668p.
12:15pm: CFOs growing defensive ahead of Brexit
British blue-chips continued to lose ground in early afternoon trade, unable to shake off dreary sentiment voiced by businesses about Brexit.
The FTSE 100 fell 46 points to 7,272, moving around an intraday low.
Deloitte said its second-quarter survey of chief financial officers showed three-quarters expect Brexit to result in deterioration in the long-term business environment, the highest proportion since the Brexit referendum was held in June 2016.
The survey showed that 40% of CFOs plan to scale back their hiring plans. Meanwhile, plans to reduce capital expenditure have risen to 34% from 25% last quarter, the accountancy firm said. CFOs are also aiming to ramp up their defensive strategies such as increasing cash flow and reducing costs.
Deloitte survey hit on the same note with the British Chambers of Commerce saying Brexit uncertainty for businesses is growing.
Among movers, Lloyds Banking Group PLC (LON:LLOY) appeared to be the most actively traded, with shares down 0.6%. The UK’s largest high street lender is in talks to merge its £13bn wealth wealth management business into a new joint venture with asset manager Schroders PLC (LON:SDR).
11am: Footsie declines
Downbeat results of a survey by the British Chambers of Commerce are weighing on UK stocks and sterling, with Brexit-related gloom among businesses suggesting the UK’s economic growth prospects are at the lowest since the global financial crisis.
The BCC’s quarterly economic survey of 5,600 businesses showed recruitment efforts by services firms have hit their lowest level for 25 years. The percentage of firms trying to take on new staff dropped to 67% from 77% during the period, and 75% of these firms have reported difficulties in recruiting, marking a record high.
That’s not good news for the UK economy as the services sector drives about 75% of GDP activity.
The BCC said in the manufacturing sector, the balance of firms reporting a rise in export sales and orders fell to the lowest in two years.
“These results suggest that the current period of below average GDP growth continued into the third quarter of 2018,” said Suren Thiru, BCC head of economics, in the survey’s statement.
“Brexit uncertainty and the increasing cost of imported raw materials is weighing on the UK’s external position – further evidence that the persistent weakness in sterling is doing more harm than good. As a consequence, net trade is likely to have contributed precious little to UK GDP growth in Q3,” said Thiru.
In late morning trade, the FTSE 100 was down 26 points at 7,292.
10am: FTSE struggles around three-week low
UK blue-chips sagged further in Monday morning trade, keeping the index around a multi-week low as new sentiment surveys highlighted anxiety among businesses over Brexit.
The FTSE 100 fell 19 points to 7,299, extending Friday’s hefty loss of 99 points that left the index at around a three-week low.
“That the pound is also struggling this Monday is likely preventing the UK index from posting greater losses, with cable slipping 0.3% to duck back under the $1.31 mark it had crossed last Friday,” said Connor Campbell, financial analyst at Spreadex.
But pound weakness wasn’t inspiring equity gains either, with the currency hurt following separate surveys from Deloitte and the British Chamber of Commerce showing UK companies are becoming more anxious about the country’s pending exit from the European Union. Just 13% of chief financial offers are more optimistic about company prospects, down from 24% three months ago, according to the Deloitte accountancy group.
Among individual, Halma PLC (LON:HLMA) lost the most, down 2.6% after a downgrade of the safety-technology maker’s rating at Shore Capital to Hold from Buy.
Apparel maker Next PLC (LON:NXT) and utility companies Centrica PLC (LON:CAN), United Utilities Group PLC (LON:UU. and SSE PLC (LON:SSE) were top performers.
8.40am: Footside flat at the open
The FTSE opened flat as it resisted the pull from China, where a wave of selling knocked 3% off the value of the benchmark stocks index.
Closer to home, wrangling over Italy’s new budget should keep a cap on sentiment.
“Over the weekend a letter from the European Commission to the Italian government voiced serious concerns about the budget,” said Neil Wilson of Markets.com.
“Jean-Claude Juncker has only said that the EU will assess only the finalised budget and not the plans, with the final copy due by October 15.”
Topping the blue-chip risers, up 1.5%, was Schroders (LON:SDR), which confirmed talks with Lloyds Banking Group (LON:LLOY) over a wealth management joint-venture.
On the flipside, IAG (LON:IAG) ran into a little turbulence after Citigroup downgraded the shares to ‘neutral’, knocking 2% from its value.
Dropping down a division, the insurer Lancashire Holdings (LON:LRE) fell 5.4% after saying its results would be affected negatively by a run of natural disasters.
An early riser among the small-caps, up 11%, was hVIVO (LON:HVO) after landing two contracts worth £9mln and telling investors interest in its services was strong.
The company specialises in human disease models used by large pharma companies to test drugs.
6.45am: FTSE 100 set to start week in reverse gear
The FTSE 100 is expected to start the week on the back foot, as investor sentiment remains negative across the globe.
CFD and spread betting firm IG Markets is calling the London index just slightly lower, with the spread seen as 7,319 to 7,321.
Last week ended with caution, particularly as US employment stats added to thoughts that America is set to see interest rates rise more than anticipated.
“Exceptionally strong US data combined with hawkish comments from the Fed’s Jerome Powell led investors to believe that the path of rate hikes could steepen,” said Jasper Lawler, analyst at London Capital Group.
“Fears that higher interest rates will dampen growth kept equities out of favour.”
This morning, in Asia, Japan’s Nikkei was down 191 points or 0.8% changing hands at 23,783 while Hong Kong’s Hang Seng was 280 points or 1.05% lower at 26,293 and the Shanghai Composite was off 3.5% at 2,722.
Around the markets
Sterling: US$1.3088, down 0.24%
Brent Crude: US$83.45 per barrel, down 0.85%
Gold: US$1,195 an ounce, down 0.45%
Bitcoin: US$6,557, down 0.38%
Proactive news headlines
Out-of-home virtual reality company Immotion Group PLC (LON:IMMO) has disposed of its loss-making Japanese entertainment division.
MySQUAR Limited (LON:MYSQ), the Myanmar-language technology company is to sell and promote WeChat advertising products and services in Myanmar.
MTI Wireless Edge Ltd’s (LON:MWE) subsidiary, Mottech Water Solutions Ltd, has secured a contract for its wireless irrigation software in Mozambique, its first in the country.
Base Resources LTD (LON:BSE) has provided an update on reserves and resources at its mineral sands projects in Africa. Around 13mln tonnes of ore was mined out in the 12 months to June 2018 at Kwale, but this has been made up for by the new 857mln tonne resource in Madagascar.
Physiomics Plc (LON:PYC) saw revenues almost double last year, bolstered by the signing of a lucrative contract with German firm Merck KGaA.
Ironridge Resources LTD (LON:IRR) has hit more high grade lithium at its Ewoyaa project in Ghana. Results from a further 2,206 metres of drilling include multiple broad high-grade drill intersections.
PCF Group Plc (LON:PCF) said its wholly-owned PCF Bank Limited has agreed to buy UK specialist finance provider Azule Limited for up to £5.6mln.
hVIVO PLC (AIM:HVO), a specialist in human disease models, said it is in talks with pharmaceutical companies over further deals after landing new contracts worth £9mln.
North Sea-focused oil group i3 Energy PLC (LON:I3E) has reshuffled its senior management team with Majid Shafiq taking over as chief executive and founder Neil Carson moving to a non-executive role.
Active Energy Group PLC (LON:AEG) has updated investors on its interest in Canada where it is now amending its application to the province of Newfoundland and Labrador, to focus exclusively on forestry opportunities and the development of one or more dedicated CoalSwitch plants.
Ceres Power Holdings Plc (LON:CWR) has announced it will launch a new fuel cell manufacturing facility in the UK in Redhill, Surrey.
In the financial year to 30 September 2018, Tharisa plc (LON:THS) produced 152,200 ounces of platinum group metals and just under 1.5mln tonnes of chrome concentrate from its operations in South Africa.
KEFI Minerals plc (LON:KEFI) has secured approval from local, zonal and regional authorities for the resettlement of local people at the Tulu Kapi gold project in Ethiopia.
Arc Minerals Limited’s (LON:ARCM) recent drilling at its Zamsort project has hit wide zones of copper and cobalt similar to other large deposits in Zambia.
BlueRock Diamonds PLC (LON:BRD) achieved record production numbers from its Kareevlei diamond mine in South Africa last quarter.
Business news headlines
Treasury weighs up tax break for landlords who sell to generation rent – The Guardian
Lloyds to merge £13bn wealth unit in three-part Schroders deal – Sky News
Brexit anxiety for businesses 'at highest since referendum' – The Guardian
Club 18-30: Thomas Cook to close holiday brand this month – BBC News
RBS could change name to repair battered image – The Times