London close: Shire leads FTSE 2.83% lower

The FTSE tumbled 2.83% on Wednesday thanks to weak data, news of Abbvie's reconsideration of its bid for Shire and a slide in US stocks, particularly on the Dow Jones.

After making fairly steady declines throughout the session, the top tier index closed 181.04 points lower at 6,211.64.

"This afternoon has seen a shock sell off on major indices; the Dax, Dow and FTSE have been slammed by underwhelming US data creating mass confusion within the market," said Toby Goar.

Commerce Department figures showed retail sales in the US fell more than expected in September, with a 0.3% decline exceeding the 0.2% fall estimated by estimates, following a 0.6% gain in August, the biggest increase in four months.

The producer price index for September fell 0.1% as opposed to expectations of a 0.1% gain.

Meanwhile, sales at automobile dealers dropped 0.8%, the most since January, after a 1.9% increase the prior month.

According to data from Ward’s Automotive Group, sales fell to a 16.3m annualised rate in September, its lowest level since April, from a 17.5m pace a month earlier that was the highest since January 2006.

It was a data heavy session across the globe, which saw the UK unemployment rate drop to 6% in the three months to August, the lowest since October 2008. Consensus estimates had been expecting a smaller drop to 6.1% from the previous month’s tally of 6.2%.

However, not all economic data was as positive on Wednesday, with the annual rate of Chinese consumer price inflation falling to an almost five-year low of 1.6% in September from 2% a month earlier, showing that domestic demand still remains weak. However, it has raised hopes that the government will step in with further stimulus to avert a slowdown.

Closer to home, the German consumer price index (CPI) remained at 0.8% year-on-year in September as expected, with prices actually unchanged when compared with August 2014.

"Germany’s CPI continuing to flat-line add[s] to deflationary and recessionary concerns in the Eurozone," said Mike van Dulken, head of research at Accendo Markets.

Shire leads downside after Abbvie says it's reconsidering takeover

The share price of UK pharmaceutical group Shire collapsed after US drugmaker Abbvie said it was reconsidering its offer in light of the US Treasury’s new rules regarding the takeover of foreign companies, specifically tax inversion deals. Shire pointed out it would be due a break-up fee of roughly $1.64bn if the deal falls through, but that didn't stop the latter's shares from sinking by nearly 23%.

The news dragged down sector peer Smith & Nephew as well as a number of other health-related stocks.

Falling oil prices pushed producers Tullow, Shell and BP into the red as Brent crude futures continued to fall after registering their worst one-day drop in four years on Tuesday.

Royal Mail was one of the day's small handful of risers, lifted in part by JP Morgan Cazenove which reiterated its 'overweight' rating on the stock, saying that concerns about parcel competition were fully reflected in the valuation.

Fresnillo also moved into positive territory after maintaining its guidance for silver production and actually increased its target for gold, after factoring in more volumes from the recent buyout of its Penmont joint venture.

On the second tier, CSR shares leapt after fellow chip designer Qualcomm announced it was buying out the company for 900p a share or £1.56bn - a 36% premium to Tuesday's closing price.

Infrastructure group Balfour Beatty saw its share price jump after appointing Qinetiq's chief executive officer Leo Quinn to take up the same position on its own board in 2015, ending a five-month search for a new boss. Qinetiq's share price was sharply lower.

Credit Suisse pushed Aveva shares higher after upgrading its share to 'outperform' from 'neutral' and upping its target price from 1,700p to 1,800p.

Market Movers
techMARK 2,586.99 -3.32%
FTSE 100 6,211.64 -2.83%
FTSE 250 14,426.74 -1.66%

FTSE 100 - Risers
Royal Mail (RMG) 407.40p +1.88%
Morrison (Wm) Supermarkets (MRW) 157.60p +0.70%
Fresnillo (FRES) 794.00p +0.44%
Burberry Group (BRBY) 1,428.00p +0.21%

FTSE 100 - Fallers
Shire Plc (SHP) 4,012.00p -21.95%
Smith & Nephew (SN.) 921.50p -5.39%
Tullow Oil (TLW) 494.20p -4.69%
Barclays (BARC) 212.20p -4.41%
Royal Bank of Scotland Group (RBS) 342.20p -4.36%
Weir Group (WEIR) 2,120.00p -4.20%
Coca-Cola HBC AG (CDI) (CCH) 1,267.00p -4.16%
Ashtead Group (AHT) 893.00p -3.98%
Vodafone Group (VOD) 186.30p -3.92%
Prudential (PRU) 1,334.00p -3.51%

FTSE 250 - Risers
CSR (CSR) 855.50p +29.92%
Balfour Beatty (BBY) 156.50p +5.25%
Hochschild Mining (HOC) 125.00p +2.71%
Bellway (BWY) 1,590.00p +1.60%
Big Yellow Group (BYG) 503.00p +1.21%
NMC Health (NMC) 491.00p +1.20%
Savills (SVS) 595.50p +0.93%
AO World (AO.) 167.70p +0.84%
Rank Group (RNK) 161.30p +0.81%
Redrow (RDW) 263.00p +0.73%

FTSE 250 - Fallers
QinetiQ Group (QQ.) 193.00p -11.79%
EnQuest (ENQ) 77.30p -9.96%
Ferrexpo (FXPO) 87.05p -6.55%
Just Eat (JE.) 255.70p -6.27%
Bank of Georgia Holdings (BGEO) 2,185.00p -5.45%
Hays (HAS) 110.70p -5.38%
Man Group (EMG) 108.30p -5.33%
Premier Oil (PMO) 260.60p -5.24%
Foxtons Group (FOXT) 200.00p -4.76%
Rotork (ROR) 2,376.00p -4.54%