London close: FTSE closes lower as oil prices tumble

The FTSE 100 closed lower on Tuesday as oil prices fizzled and investors sifted through a batch of corporate earnings.

Standard Chartered and BHP Billiton led the declines on London’s top-tier index after posting weak earnings.

BHP Billiton dragged other miners into the red as it swung to a loss for the first time in more than 16 years. The group posted a loss of $5.67bn for the six months to December 2015, compared to a profit of $5.35bn for the same period in 2014, as lower commodity prices hurt revenue.

Standard Chartered was under the cosh after it posted a surprise annual pre-tax loss of $1.5bn, down from profit of $4.2bn a year earlier. Revenue fell 15% to $15.4bn, missing estimates of $15.9bn, reflecting a slowdown in emerging markets, falling commodity prices and bad loans.

GKN was also on the back foot after posting a broadly flat annual profit as growth in sales of auto and aircraft parts offset declines in agricultural components.

Drax slumped as it revealed a drop in full year earnings before interest, tax, depreciation and amortisation to £169m in 2015 from £229m a year earlier amid severe market deterioration and difficult regulatory challenges.

On the upside, housebuilding stocks reversed declines after Persimmon reported a 34% increase in full year underlying profit before tax to £637m, as revenues rose 13% to £2.9bn, driven by a gain in the average selling price and a jump in legal completions.

The London Stock Exchange surged after confirming that it is in talks with Deutsche Boerse about a potential merger of equals of the two businesses.

Meggitt was also sitting higher after reporting a 1% increase in 2015 pre-tax profit on a 6% rise in revenue despite what the chief executive described as a “challenging year for the group”.

InterContinental Hotels rallied as it announced a robust set of final results while earnings reports from Morgan Advanced Materials, Wood Group and Ladbrokes were also given the thumbs up by investors.

Meanwhile, oil prices declined on doubts that global producers will agree to a freeze in output to address an oversupplied market. Saudi Arabia and Russia have proposed to halt output at January levels but Iran is seen unlikely to agree to the deal after recently being freed of western sanctions that have hurt its crude trade.

Brent crude plunged 4.08% to $33.33 per barrel and West Texas Intermediate tumbled 4.9% to $31.83 per barrel at 1650 GMT.

UK bosses against Brexit, Carney rules out negative interest rates

Brexit remained in focus with the latest reports showing that bosses at more than a third of Britain’s biggest businesses are backing the campaign to remain in the European Union. Asda, BT, Marks & Spencer, Kingfisher and Vodafone chiefs supported a letter warning of the risks to the economy of exiting the bloc.

Bank of England Governor Mark Carney told lawmakers on Tuesday that the central bank was not making a judgement on the consequences of Brexit but that a special unit had been formed to investigate a potential fall-out.

He also stressed that the BoE had no intention to impose negative interest rates on banks amid concerns about the risks of a global economic slowdown.

Gertjan Vlieghe, the newest member of the Monetary Policy Committee, said he might vote for a rate cut if the global economy worsened.

Economic data

German business confidence declined in February, the IFO revealed. The sentiment index dropped to 105.7 this month from 107.3 in January, missing analysts’ estimates of 106.8.

Across the Atlantic, data released by the National Association of Realtors showed US existing home sales edged up 0.4% to an annual rate of 5.47m from a downwardly-revised 5.45m in December, beating economists’ expectations for a drop to 5.32m.

Separately, the S&P/Case-Shiller National Home Price Index revealed house prices in the US rose a touch less than expected in December. The S&P/Case-Shiller 20-City Composite index was up 5.7% on the year, the same as November but just missing economists' expectations for a 5.8% increase.

US consumer confidence slumped much lower than expected in February, according to data from the Conference Board. The Consumer Confidence Index declined to 92.2 in February, having nudged higher to 97.8 in January. A fall to 97 had been forecast by economists.

Market Movers

FTSE 100 (UKX) 5,961.29 -1.27%
FTSE 250 (MCX) 16,211.77 -0.47%
techMARK (TASX) 3,114.30 -0.53%

FTSE 100 - Risers

London Stock Exchange Group (LSE) 2,630.00p 13.71%
InterContinental Hotels Group (IHG) 2,540.00p 3.50%
Persimmon (PSN) 2,029.00p 2.84%
Provident Financial (PFG) 3,279.00p 2.50%
Randgold Resources Ltd. (RRS) 6,520.00p 2.35%
International Consolidated Airlines Group SA (CDI) (IAG) 551.00p 2.32%
Fresnillo (FRES) 978.50p 1.93%
Carnival (CCL) 3,461.00p 1.29%
Taylor Wimpey (TW.) 176.50p 0.86%
Sports Direct International (SPD) 402.80p 0.85%

FTSE 100 - Fallers

BHP Billiton (BLT) 740.20p -6.89%
Standard Chartered (STAN) 406.95p -6.73%
Anglo American (AAL) 453.10p -6.34%
GKN (GKN) 271.10p -6.16%
Aberdeen Asset Management (ADN) 235.00p -5.09%
Burberry Group (BRBY) 1,234.00p -4.27%
Antofagasta (ANTO) 496.50p -4.06%
Royal Bank of Scotland Group (RBS) 235.90p -3.79%
Pearson (PSON) 792.00p -3.30%
BP (BP.) 345.10p -3.24%

FTSE 250 - Risers

Meggitt (MGGT) 430.20p 11.42%
Ladbrokes (LAD) 129.30p 5.64%
Wood Group (John) (WG.) 614.00p 5.23%
Millennium & Copthorne Hotels (MLC) 423.10p 5.20%
Indivior (INDV) 165.90p 4.60%
Centamin (DI) (CEY) 88.00p 3.77%
TalkTalk Telecom Group (TALK) 213.00p 3.75%
Morgan Advanced Materials (MGAM) 222.90p 3.34%
Jimmy Choo (CHOO) 125.50p 2.70%
Sophos Group (SOPH) 210.20p 2.49%

FTSE 250 - Fallers

Drax Group (DRX) 237.90p -7.90%
Restaurant Group (RTN) 532.00p -5.17%
Unite Group (UTG) 602.00p -4.29%
Vedanta Resources (VED) 257.90p -3.95%
Mediclinic International (MDC) 818.00p -3.93%
Shaftesbury (SHB) 824.50p -3.85%
St. Modwen Properties (SMP) 314.10p -3.83%
Paragon Group Of Companies (PAG) 293.00p -3.55%
Computacenter (CCC) 806.00p -3.47%
Weir Group (WEIR) 901.50p -3.22%