London midday: Miners and gambling stocks drag FTSE lower
Equities in London retreated on Monday, with mining stocks and gambling companies providing a big drag on markets, with the FTSE 100 down 0.7% at 7,631 by lunchtime.
Ongoing concerns about China's property sector were likely dampening optimism on the markets, after struggling Chinese developer China Evergrande cancelling a creditor meeting and scrapped a $35bn debt-restructuring plan, causing shares to drop 19% in Hong Kong. The Hang Seng Index fell 1.7% overnight.
Meanwhile, a disappointing trading update from gambling group Entain weighed on shares across the sector.
Investors will also likely be keeping a close eye on the price of oil again as it climbs further above the $90-a-barrel mark. Brent crude had given up earlier gains to trade mostly flat at the $92 mark by midday, coming off an earlier high of $92.73.
"Oil prices are staging gains with hedge funds adding to their bullish bets fuelled by the expectation of ongoing weakness in supplies from Saudi Arabia and Russia," said Victoria Schloar, head of investment at Interactive Investor. "JPMorgan has warned of an energy super cycle that could push oil prices back above the psychological $100 a barrel resistance level," Scholar noted.
Monday was a relatively quiet day in terms of economic data, with no major releases other than the IFO business confidence survey in Germany, which beat forecasts for September. The expectations and current assessment sub-indices both improved more than expected, while the business climate sub-index was unchanged (analysts had expected a slight fall).
Miners drop, banks gain
Mining stocks were among the worst performers on the FTSE 100, with Rio Tinto, Antofagasta and Anglo American among the worst performers, as newsflow from China hit share prices. "Anything bad in China typically has a negative knock-on effect to UK-listed diversified mining stocks," said AJ Bell investment director Russ Mould. "Investors are clearly worried that commodity demand will weaken if China’s economy continues to falter.”
Entain was a big mover, dropping 9% after the Ladbrokes owner said its third-quarter performance was weaker than expected due to adverse sporting results, regulatory headwinds and a slower-than-expected performance in Australia and Italy. As a result, full-year online net gaming revenue would be see a "low single digit percent" decline, compared with earlier guidance of "low to mid single digit" growth.
Sector peers Flutter Entertainment and 888 Holdings were also out of favour.
British insurer Aviva fell on the news it had bought AIG's UK protection business for £460m. AIG Life UK provides a full suite of individual and group protection products, with 1.3 million individual protection customers and 1.4 million group protection members, Aviva said. Aviva's boss Amanda Blanc said the deal "brings significant strategic and financial benefits" to the company.
Building materials group CRH was up 3% after kicking off another $1bn share buyback programme, taking the total amount of buybacks since May 2018 to $6bn.
GSK edged higher on the approval of its Arexvy vaccine by Japan's Ministry of Health, Labour and Welfare. The vaccine, for the prevention of RSV disease in adults aged 60 and above, marks the first RSV vaccine for this age group in Japan.
Market Movers
FTSE 100 (UKX) 7,630.78 -0.69%
FTSE 250 (MCX) 18,432.22 -0.94%
techMARK (TASX) 4,342.62 -0.52%
FTSE 100 - Risers
CRH (CDI) (CRH) 4,469.00p 2.95%
AstraZeneca (AZN) 11,182.00p 1.23%
Standard Chartered (STAN) 758.40p 1.12%
M&G (MNG) 204.60p 0.89%
Smurfit Kappa Group (CDI) (SKG) 2,744.00p 0.88%
IMI (IMI) 1,478.00p 0.54%
Pershing Square Holdings Ltd NPV (PSH) 3,012.00p 0.40%
Centrica (CNA) 168.15p 0.30%
BAE Systems (BA.) 1,014.00p 0.30%
Melrose Industries (MRO) 469.30p 0.28%
FTSE 100 - Fallers
Entain (ENT) 961.80p -8.92%
Imperial Brands (IMB) 1,679.50p -3.37%
Flutter Entertainment (CDI) (FLTR) 13,570.00p -3.21%
Rio Tinto (RIO) 5,020.00p -3.14%
Antofagasta (ANTO) 1,383.00p -2.74%
Burberry Group (BRBY) 1,951.00p -2.69%
Ocado Group (OCDO) 672.80p -2.66%
Anglo American (AAL) 2,189.00p -2.62%
Severn Trent (SVT) 2,364.00p -2.52%
Rentokil Initial (RTO) 586.60p -2.46%
FTSE 250 - Risers
Caledonia Investments (CLDN) 3,545.00p 3.20%
Pantheon International (PIN) 302.00p 3.07%
Ruffer Investment Company Ltd Red PTG Pref Shares (RICA) 274.00p 1.48%
Bakkavor Group (BAKK) 95.00p 0.85%
Close Brothers Group (CBG) 856.00p 0.82%
NextEnergy Solar Fund Limited Red (NESF) 89.20p 0.79%
The Renewables Infrastructure Group Limited (TRIG) 109.80p 0.73%
TBC Bank Group (TBCG) 2,950.00p 0.68%
HGCapital Trust (HGT) 399.50p 0.63%
Computacenter (CCC) 2,542.00p 0.55%
FTSE 250 - Fallers
888 Holdings (DI) (888) 111.40p -5.83%
Aston Martin Lagonda Global Holdings (AML) 266.00p -4.52%
Drax Group (DRX) 454.50p -3.77%
Carnival (CCL) 1,019.00p -3.60%
IP Group (IPO) 56.50p -3.42%
Watches of Switzerland Group (WOSG) 557.00p -3.05%
Ceres Power Holdings (CWR) 324.40p -2.93%
Ascential (ASCL) 195.90p -2.92%
TUI AG Reg Shs (DI) (TUI) 468.40p -2.86%
Spirent Communications (SPT) 133.50p -2.77%