London close: Stocks slide as Brexit worries grow

London stocks were in the red on Monday as worries about Brexit grew on the back of a report about the impact the vote will have on the economy.

The FTSE 100 finished down 1.07% to 6,947.55 points while the pound dipped 0.02% versus the dollar to trade at $1.2188.

Oil prices were also on the back foot after a report from Baker Hughes on Friday showed US oil drillers added four rigs in the week to 14 October to reach a total of 432. Brent crude dropped 1.2% to $51.33 per barrel and West Texas Intermediate fell 1.4% to $49.65 per barrel at 1650.

The EY Item Club said Britain faces a prolonged period of weaker growth as consumer spending slows and businesses curb investments.

The think tank expects inflation will rise due to a weaker pound post-Brexit, which may prompt consumers to refrain from spending.

Meanwhile, Chancellor Philip Hammond is reportedly butting heads with other ministers during talks about Brexit. He was also forced to deny claims he was trying to slowdown the formal Brexit process by delaying decisions on migrant curbs.

“Mr Hammond is thought to prefer a plan in which migration curbs are delayed and Britain would pay into the EU budget for single market access,” said Jasper Lawler, market analyst at CMC Markets.

“It’s a stance that would be welcomed by markets but he has been described as ‘arguing like an accountant’ and ‘only seeing the risks’ by fellow MPs.”

In other UK news, Rightmove revealed house prices rose 4.2% in October from a year ago, following a 4% increase in September.

Elsewhere, Eurozone inflation was confirmed by Eurostat at 0.4% for September, up from 0.2% in August and in line with expectations. Year-on-year inflation also came in at 0.4%, as forecast.

The European Central Bank is targeting inflation of just below 2% and meets on Thursday to decide on policy.

In the US, the Federal Reserve revealed that industrial production rose 0.1% in September (consensus: 0.2%) after falling a revised 0.5% in August.

In contrast, the Empire State manufacturing index fell to -6.8 in October from -2 in September, which was below the consensus +1.

The new orders index edged up but remained negative at -5.6, suggesting an ongoing fall in orders, and the shipments index rose to -0.6.

On the corporate front, education publisher Pearson fell sharply after saying underlying sales for the nine months to the end of September fell 7%.

Housebuilders were also on the back foot amid growing concerns about Brexit.

On the upside, Standard Chartered gained ground on news that India’s Essar Group – which owes the bank money – has agreed to sell a 98% stake in its Essar Oil unit to a consortium led by Russia’s Rosneft.

Glencore and Anglo American benefited from a note by RBC Capital Markets, which upped its price forecasts for coking coal and thermal coal and recommended investors increase their exposure to non-precious metal mining shares.

RBC recommended shares of Anglo American, Glencore, Rio Tinto and South32.

Market Movers

FTSE 100 (UKX) 6,947.55 -0.94%
FTSE 250 (MCX) 17,792.50 -1.04%
techMARK (TASX) 3,517.61 -0.75%

FTSE 100 - Risers

Rolls-Royce Holdings (RR.) 774.00p 1.24%
Standard Chartered (STAN) 658.40p 0.97%
BT Group (BT.A) 378.65p 0.89%
Lloyds Banking Group (LLOY) 52.82p 0.74%
Glencore (GLEN) 229.90p 0.72%
AstraZeneca (AZN) 4,974.50p 0.56%
Morrison (Wm) Supermarkets (MRW) 221.40p 0.54%
ITV (ITV) 173.40p 0.52%
Anglo American (AAL) 1,010.50p 0.45%
Randgold Resources Ltd. (RRS) 6,820.00p 0.29%

FTSE 100 - Fallers

Pearson (PSON) 762.50p -8.41%
Admiral Group (ADM) 1,945.00p -4.00%
Standard Life (SL.) 324.60p -3.71%
Hargreaves Lansdown (HL.) 1,155.00p -3.02%
Barratt Developments (BDEV) 468.70p -2.90%
DCC (DCC) 6,750.00p -2.74%
Persimmon (PSN) 1,664.00p -2.46%
Legal & General Group (LGEN) 205.70p -2.42%
Royal Mail (RMG) 485.10p -2.37%
Next (NXT) 4,494.00p -2.35%

FTSE 250 - Risers

Drax Group (DRX) 322.10p 3.47%
Telecom Plus (TEP) 1,142.00p 3.25%
Grafton Group Units (GFTU) 524.50p 2.74%
Kaz Minerals (KAZ) 262.00p 1.47%
Ibstock (IBST) 159.80p 1.33%
Spire Healthcare Group (SPI) 382.60p 0.95%
Go-Ahead Group (GOG) 2,025.00p 0.80%
Hastings Group Holdings (HSTG) 210.60p 0.77%
CLS Holdings (CLI) 1,550.00p 0.65%
SIG (SHI) 113.30p 0.62%

FTSE 250 - Fallers

PayPoint (PAY) 1,100.00p -5.82%
Euromoney Institutional Investor (ERM) 944.00p -5.22%
Rank Group (RNK) 193.30p -4.83%
Supergroup (SGP) 1,429.00p -4.16%
Senior (SNR) 208.90p -4.13%
Just Eat (JE.) 522.00p -3.42%
Crest Nicholson Holdings (CRST) 397.90p -3.40%
Renishaw (RSW) 2,782.00p -3.37%
Entertainment One Limited (ETO) 225.30p -3.35%
Domino's Pizza Group (DOM) 319.40p -3.33%