London close: Stocks slide as US presidential debate and OPEC meeting eyed

London stocks tumbled on Monday on jitters ahead of the first US presidential debate and an OPEC meeting.

Donald Trump and Hillary Clinton will come face-to-face at the US presidential debate scheduled for 0200 BST, which could pave the way for the outcome of the November election.

IG market analyst Joshua Mahony said: “Tonight’s US presidential election debate is a major event for financial markets, with risky assets likely to see significant volatility, should Trump manage to further build on the gains he has made over recent weeks.

“Despite significant movements towards Trump in recent polls, IG clients perceive there still to be a 62% chance of a Clinton win, according to the IG binary market.”

He added: "That being said, Hilary remains a somewhat uninspiring personality and there is a distinct risk that tonight’s debate could see the polls tighten even further, thus driving investors towards havens such as the yen and Treasuries.”

Meanwhile, oil prices gained on hopes that producers will agree to limit output to address the global supply glut. OPEC members are meeting informally in Algeria on the sidelines of the International Energy Forum which started on Monday and continues until Wednesday.

Brent crude jumped 3.06% to $47.34 per barrel and West Texas Intermediate rose 3.1% to $45.94 per barrel at 1642 BST.

The sharp sell-off in Europe was also attributed to shares in Deutsche Bank hitting an all-time low after reports that German Chancellor Angela Merkel is refusing to bail-out the lender in the wake of its legal dispute in the US. The US Justice Department has suggested the bank pay $14bn to settle a number of investigations related to mortgage securities.

On the FTSE 100, financial services firms were on the back foot after two surveys showed growing concerns over Brexit.

A survey by CBI and PwC showed optimism among financial services firms during the three months to September dropped for the third consecutive quarter. More than half of the firms surveyed saw the Brexit vote as a negative for the financial services industry.

A separate survey by advisory firm KPMG revealed more than 75% of British business leaders have said they are pondering moving their businesses overseas because of the EU referendum.

Housebuilders were under the cosh after data from the British Banking Association showed loans for house purchases fell to a new 19-month low of 36,997 in August from the revised previous figure of 37,672 a month before. Economists had expected 37,100 loans. Shares in Taylor Wimpey, Barratt Developments and Persimmon dropped.

InterContinental Hotels also slumped as Morgan Stanley downgraded the stock to 'underweight' and trimmed the target price to 3,100p from 3,300p after the shares' recent outperformance and on concerns that the US hotel cycle is peaking.

Lloyds Banking Group was under pressure after Goldman Sachs cut its stance on the lender to ‘sell’ from ‘neutral’ and lowered the price target 6% to 50p as it pointed to increased competition and low rates.

Hays shares fell after RBC Capital Markets downgraded the recruiter to ‘sector perform’ from ‘outperform’ as the stock has performed well and is now near its 140p price target.

Carnival rallied after its net revenues rose 2.7% in the three months ended 31 July 2016, which was towards the top end of the 2-3% rise projected by the firm. As a result, management raised their expected earnings per share for the full year to $3.33 to $3.37, compared to the $3.25 to $3.35 range it had in June.

UDG Healthcare gained as it announced that Chris Corbin, the chief executive officer of its largest division, Ashfield Commercial & Medical Services, will retire in April 2019.

Market Movers

FTSE 100 (UKX) 6,818.04 -1.32%
FTSE 250 (MCX) 17,722.80 -1.12%
techMARK (TASX) 3,485.86 -1.15%

FTSE 100 - Risers

Micro Focus International (MCRO) 2,137.00p 0.61%
Burberry Group (BRBY) 1,409.00p 0.57%
London Stock Exchange Group (LSE) 2,844.00p 0.53%
Fresnillo (FRES) 1,794.00p 0.45%
National Grid (NG.) 1,079.00p 0.42%
Coca-Cola HBC AG (CDI) (CCH) 1,740.00p 0.40%
Randgold Resources Ltd. (RRS) 7,900.00p 0.00%
Hammerson (HMSO) 585.50p -0.00%
Informa (INF) 711.00p -0.00%
GKN (GKN) 323.00p -0.06%

FTSE 100 - Fallers

InterContinental Hotels Group (IHG) 3,096.00p -5.75%
Pearson (PSON) 726.00p -4.22%
Taylor Wimpey (TW.) 149.00p -4.18%
Barratt Developments (BDEV) 476.80p -4.10%
Persimmon (PSN) 1,764.00p -4.03%
Kingfisher (KGF) 368.00p -3.89%
Dixons Carphone (DC.) 360.70p -3.35%
Lloyds Banking Group (LLOY) 54.25p -3.09%
Aviva (AV.) 438.10p -3.08%
Standard Life (SL.) 342.70p -2.97%

FTSE 250 - Risers

Evraz (EVR) 158.10p 1.41%
NMC Health (NMC) 1,413.00p 1.15%
AO World (AO.) 162.50p 1.12%
Homeserve (HSV) 566.50p 0.98%
Tritax Big Box Reit (BBOX) 145.00p 0.97%
Redefine International (RDI) 42.88p 0.92%
Cranswick (CWK) 2,311.00p 0.83%
Vedanta Resources (VED) 559.50p 0.81%
UDG Healthcare Public Limited Company (UDG) 630.00p 0.64%
Micro Focus International (MCRO) 2,137.00p 0.61%

FTSE 250 - Fallers

Sports Direct International (SPD) 285.00p -5.88%
Shawbrook Group (SHAW) 236.90p -4.67%
Crest Nicholson Holdings (CRST) 441.90p -4.60%
Thomas Cook Group (TCG) 69.70p -4.52%
Diploma (DPLM) 838.00p -4.45%
Bellway (BWY) 2,299.00p -4.21%
Bovis Homes Group (BVS) 838.50p -4.12%
Redrow (RDW) 392.70p -3.82%
Pagegroup (PAGE) 331.00p -3.81%
Hays (HAS) 129.30p -3.29%