London close: Stocks close lower as oil prices slump again

The FTSE 100 closed lower on Monday as oil prices continued to slide and investors looked ahead to an expected US interest rate hike.

London’s top index finished down 1.32% to 5,874.06 points.

At 1616 GMT Brent crude was 1.7% lower at $37.28 per barrel while West Texas Intermediate recovered 0.2% to $35.70 per barrel after dipping below $35. The slump comes amid concerns about a supply glut and a slowdown in demand.

“Arguably, the correlation between oil prices and the FTSE is as strong as it ever has been, and with oil breaking towards multi-year lows, this is not a good sign for stocks,” said IG analyst Chris Beauchamp.

“The positive influence felt by strong Chinese data overnight is all but forgotten by now, and instead the feeling is that markets are nervously preparing for the Fed decision.”

Earlier in the session, UK stocks were sitting higher after better-than-expected Chinese data on industrial production and retails sales over the weekend.

Chinese industrial production rose 6.2% in November from a year earlier, compared to the previous month’s 5.6% increase and expectations for a 5.7% gain, the National Bureau of Statistics revealed on Saturday.

Separately, Beijing's statistics agency said retail sales in the world’s second largest economy jumped 11.2% in November, beating the 11.1% forecast and following a 11% rise in October.

In the Eurozone, industrial production rose 0.6% in October from the previous month, according to data released by Eurostat on Monday. The figure surpassed economists’ expectations of a 0.3% rise, while industrial production on the year rose 1.9%, also beating estimates.

Looking ahead, the Federal Reserve is set to announce its interest rate decision on Wednesday. The central bank is widely expected to raise rates for the first time in nearly a decade by 25 basis points.

“At this stage, it is almost universally expected that, after a seven-year period at near-zero, the Fed will raise interest rates this Wednesday,” said Capital Economics.

“Like everybody else, we anticipate a 25 basis point increase in the target range for the fed funds rate, taking it to between 0.25% and 0.50%.”

In company news, mining stocks were in the red, including Glencore, Randgold, BHP Billiton and Fresnillo, as gold, silver and copper prices fell on the Comex.

Information services company Experian also sank after it announced it completed the sale of its consumer insights businesses Hitwise and Simmons to California-based private equity firm Symphony Technology Group for $47m (£31.1m) and up to an additional $5m based on an earnout.

Old Mutual rebounded after last week’s losses due to political issues in South Africa.

Entertainment One declined after saying it has completed its refinancing arrangement which was announced to shareholders at the beginning of the month.

Royal Dutch Shell dipped as it said it was axing 2,800 staff as part of its massive merger with BG after clearing its last international regulatory hurdle..

RPC Group was a high riser on its plans to acquire Global Closure Systems Group (GCS Group) in a deal valued at €650m (£470m).

Market Movers

FTSE 100 (UKX) 5,878.65 -1.25%
FTSE 250 (MCX) 16,782.35 -0.56%
techMARK (TASX) 3,093.62 -1.41%

FTSE 100 - Risers

Old Mutual (OML) 158.60p 1.86%
Sky (SKY) 1,071.00p 1.42%
Sainsbury (J) (SBRY) 237.50p 1.06%
Hargreaves Lansdown (HL.) 1,421.00p 1.00%
TUI AG Reg Shs (DI) (TUI) 1,165.00p 0.95%
InterContinental Hotels Group (IHG) 2,516.00p 0.84%
Morrison (Wm) Supermarkets (MRW) 140.00p 0.72%
Berkeley Group Holdings (The) (BKG) 3,517.00p 0.54%
Barratt Developments (BDEV) 595.50p 0.51%
United Utilities Group (UU.) 924.50p 0.38%

FTSE 100 - Fallers

Glencore (GLEN) 80.16p -6.10%
Shire Plc (SHP) 4,089.00p -4.88%
Anglo American (AAL) 281.25p -3.99%
Antofagasta (ANTO) 412.30p -3.87%
Standard Chartered (STAN) 477.00p -3.70%
BHP Billiton (BLT) 669.70p -3.53%
ARM Holdings (ARM) 1,043.00p -2.89%
Standard Life (SL.) 366.70p -2.81%
3i Group (III) 450.00p -2.81%
Experian (EXPN) 1,124.00p -2.68%

FTSE 250 - Risers

Polymetal International (POLY) 538.50p 4.77%
Enterprise Inns (ETI) 107.60p 4.47%
Auto Trader Group (AUTO) 437.40p 3.65%
Investec (INVP) 432.20p 3.15%
Go-Ahead Group (GOG) 2,646.00p 2.76%
Nostrum Oil & Gas (NOG) 379.90p 2.68%
Halfords Group (HFD) 345.40p 2.55%
BGEO Group (BGEO) 1,874.00p 2.52%
Rathbone Brothers (RAT) 2,250.00p 2.27%
Dairy Crest Group (DCG) 638.00p 2.16%

FTSE 250 - Fallers

Evraz (EVR) 59.00p -14.18%
Acacia Mining (ACA) 159.20p -10.56%
Ophir Energy (OPHR) 80.75p -6.05%
Kaz Minerals (KAZ) 90.00p -5.51%
Entertainment One Limited (ETO) 168.10p -5.03%
Tullow Oil (TLW) 152.00p -4.76%
Vedanta Resources (VED) 277.00p -4.45%
Bovis Homes Group (BVS) 933.00p -4.41%
Aldermore Group (ALD) 203.30p -4.10%
Spire Healthcare Group (SPI) 311.80p -3.74%