London close: Brexit, oil and Fed worries combine to hammer shares

A combination of falling oil and metals prices, Brexit fears, uncertainties on US interest rates and an poor start to trading on US equities markets sent UK markets deep into red territory at the close on Friday.

The blue-chip index of 100 leading shares plunged almost 2% on the day as investors sought other asset classes as a safe haven.

At 1630 BST Brent crude had given up 2% to $50.88, while West Texas Intermediate skipped below the $50 mark to $49.60, a decline of 1.9%, although both were up on the week.

Meanwhile, with the EU referendum fast approaching, investors fretted that "Brexit" was a distinct possibility. Britain votes on its EU membership on 23 June.

Across the Atlantic, the University of Michigan's index of consumer sentiment fell to 94.3 in June from an unrevised May reading of 94.7, which was better than forecast.

US shares also opened lower which compounded the downward pressure in the closing stages of the London session.

The pound was down 0.87% against the dollar at $1.433. Gold, normally a safe port in an economic storm, traded slightly higher around the $1,270 mark.

On the corporate front, Sky shares gained in early trade but fell victim to the broader malaise after the broadcaster paid €3.5bn to secure the lion’s share of TV rights to German Bundesliga football matches. The shares were down 3% at the close.

Grocery giant Tesco declined after confirming the proposed sale of its Kipa and Giraffe businesses, as it continues to slim down and focus on its core retail business. The FTSE 100 firm said it has agreed to sell its 95.5% controlling share in Turkish supermarket chain Kipa to Swiss retail group Migros.

In a separate transaction, Tesco confirmed it is also selling the Giraffe restaurant chain which it picked up in 2013, to Harry Ramsden’s owner Boparan Restaurants Holdings.

Schroders was in the red as Reuters reported that the company appointed Shigesuke Kashiwagi, former chief financial officer of Nomura Holdings, as its president and country head of Japan.

BP and Det norske oljeselskap said they were creating of Aker BP ASA, an independent oil and gas company combining the assets and expertise from both companies' Norwegian exploration and production operations to form the largest Norwegian independent oil and gas producer. The $1.3bn share deal is aimed at cutting costs, increasing profitability and challenging Statoil's Norwegian offshore dominance.

Inmarsat gained after announcing a five year deal with Marlink which will see its Fleet Xpress broadband service made available on more than 2,000 ships over five years.

Market Movers

FTSE 100 (UKX) 6,119.47 -1.80%
FTSE 250 (MCX) 16,828.10 -1.66%
techMARK (TASX) 3,041.85 -1.70%

FTSE 100 - Risers

Rolls-Royce Holdings (RR.) 605.50p 1.00%
Fresnillo (FRES) 1,214.00p 0.25%
Inmarsat (ISAT) 703.50p 0.21%
Rexam (REX) 639.00p 0.08%
SABMiller (SAB) 4,289.50p -0.14%
Royal Dutch Shell 'B' (RDSB) 1,793.50p -0.17%
Randgold Resources Ltd. (RRS) 6,610.00p -0.23%
Royal Dutch Shell 'A' (RDSA) 1,780.00p -0.25%
BT Group (BT.A) 422.75p -0.59%
Paddy Power Betfair (PPB) 9,245.00p -0.59%

FTSE 100 - Fallers

Standard Life (SL.) 317.00p -4.11%
BHP Billiton (BLT) 826.30p -3.93%
Barclays (BARC) 169.15p -3.92%
Tesco (TSCO) 151.95p -3.77%
easyJet (EZJ) 1,432.00p -3.76%
Prudential (PRU) 1,241.00p -3.76%
Standard Chartered (STAN) 515.60p -3.70%
Old Mutual (OML) 179.90p -3.54%
Anglo American (AAL) 642.50p -3.53%
Royal Bank of Scotland Group (RBS) 214.20p -3.51%

FTSE 250 - Risers

Euromoney Institutional Investor (ERM) 967.00p 2.87%
Vectura Group (VEC) 163.50p 2.51%
Allied Minds (ALM) 353.90p 2.08%
PZ Cussons (PZC) 340.80p 1.61%
Genus (GNS) 1,528.00p 1.46%
G4S (GFS) 187.80p 1.40%
HICL Infrastructure Company Ltd (HICL) 167.90p 1.39%
John Laing Infrastructure Fund Ltd (JLIF) 124.80p 1.38%
Softcat (SCT) 372.00p 1.00%
Homeserve (HSV) 476.10p 0.87%

FTSE 250 - Fallers

Essentra (ESNT) 555.50p -7.42%
Pagegroup (PAGE) 371.40p -6.92%
Hays (HAS) 126.30p -6.44%
OneSavings Bank (OSB) 306.70p -6.04%
Kaz Minerals (KAZ) 146.50p -5.97%
Countrywide (CWD) 347.00p -5.96%
Ocado Group (OCDO) 243.20p -5.88%
Restaurant Group (RTN) 359.10p -5.00%
Thomas Cook Group (TCG) 65.55p -4.65%
BGEO Group (BGEO) 2,471.00p -4.48%