London midday: UK stocks at one-month low on global concerns, Tesco plummets

UK stocks were on track to settle at their lowest level in a month on Tuesday as a recent sell-off in oil hit energy shares and a profit warning from Tesco hammered retailers.

Crude was trading at a fresh five-year low on the back of concerns about oversupply and slowing global growth. Political uncertainty in Greece and worse-than-expected economic data from the UK and Germany was also prompting investors to scale back risk appetite.

Meanwhile, Tesco surprised with an unscheduled update before markets opened, sending shares plummeting as the under-pressure supermarket delivered its fifth profit warning of the year.

After having dropped 1% the previous session, London’s FTSE 100 was down 1.2% at 6,593 by midday. It has not closed below the 6,600 mark since 7 November when it finished at 6,567.24.

“The London market is suffering from a broad selloff. Retail, natural resources and financials are in the red today as all the negative news has come at once,” said analyst David Madden from IG.

In economic data on Tuesday, the Office for National Statistics said that UK industrial production decreased 0.1% in October from the previous month, surprising analysts looking for a 0.2% rise. Chris Williamson from Markit said the results are a "timely reminder that policy-makers cannot be complacent about the UK’s recent run of strong growth persisting into the New Year."

German imports fell the most in almost two years in October,declining by 3.1% after a sharp rise of 5.2% in September. Exports fell by a less-than-expected 0.5%, leaving the trade surplus above forecasts at €20.6bn.

Investors were also feeling a little cautious following the news Greece has brought forward its presidential elections by two months, meaning they will now take place this month, potentially triggering a snap election. Greek bond yields soared while Athens’ benchmark stock index dropped over 6%.

Asian stocks also slid overnight with the Shanghai benchmark dropped over 5% as China tightened collateral rules for short-term loans.

Tesco drops 10%, energy stocks tumble

Tesco surprised the market with another profit warning, causing shares to sink 10%. The company said trading profit for the financial year ending February 2015 is not expected to exceed £1.4bn, compared with £3.315bn previously and analysts' forecasts which ranged from £1.8bn to £2.2bn.

Supermarket rivals Wm Morrison and J Sainsbury also dropped sharply following the unscheduled trading update.

News of falling sales at high street bellwether John Lewis also hit sentiment in the wider retail sector with Next, M&S and Debenhams under pressure. Sales at John Lewis were down 10.6% in the week to 6 December after a strong showing over Black Friday week.

Energy stocks were continuing to feel the heat from the recent plunge in oil prices. Prices stabilised somewhat on Tuesday after Brent finished Monday’s session at $66.19 a barrel, its lowest close since September 2009. Tullow Oil, Shell, Premier Oil and Ophir Energy were all unwanted.

Lloyds fell after analysts at Citigroup said the lender is the most at risk in the upcoming British bank stress tests because of its exposure to the UK mortgage market. Results are due out on 16 December.

Polymers group Victrex was a rare bright spark after beating forecasts with a 9% rise in annual profits. The company also raised its full-year dividend by 5% and said it would be returning £43m to shareholders as part of a special dividend.

Market Movers
techMARK 2,934.85 -1.17%
FTSE 100 6,593.04 -1.19%
FTSE 250 15,839.23 -0.71%

FTSE 100 - Risers
G4S (GFS) 281.10p +2.59%
Randgold Resources Ltd. (RRS) 4,278.00p +2.20%
BG Group (BG.) 898.80p +0.42%
Reckitt Benckiser Group (RB.) 5,270.00p +0.29%
Imperial Tobacco Group (IMT) 2,829.00p +0.11%

FTSE 100 - Fallers
Tesco (TSCO) 168.65p -9.96%
Coca-Cola HBC AG (CDI) (CCH) 1,331.00p -5.13%
Morrison (Wm) Supermarkets (MRW) 176.50p -4.54%
Intertek Group (ITRK) 2,230.00p -3.67%
Aggreko (AGK) 1,504.00p -3.65%
Weir Group (WEIR) 1,678.00p -3.62%
Sainsbury (J) (SBRY) 227.70p -3.44%
Petrofac Ltd. (PFC) 742.50p -3.19%
Shire Plc (SHP) 4,430.00p -3.15%
Barclays (BARC) 239.70p -3.01%

FTSE 250 - Risers
Victrex plc (VCT) 1,982.00p +6.33%
Elementis (ELM) 254.40p +1.23%
Hochschild Mining (HOC) 83.65p +1.21%
Big Yellow Group (BYG) 588.50p +1.20%
Cairn Energy (CNE) 169.70p +1.01%
Wetherspoon (J.D.) (JDW) 807.00p +1.00%
Fisher (James) & Sons (FSJ) 1,150.00p +0.97%
Shaftesbury (SHB) 785.50p +0.96%
Daejan Holdings (DJAN) 5,390.00p +0.75%
Hikma Pharmaceuticals (HIK) 2,045.00p +0.74%

FTSE 250 - Fallers
Fidelity China Special Situations (FCSS) 130.00p -4.20%
Ocado Group (OCDO) 337.40p -3.79%
Henderson Group (HGG) 211.40p -3.73%
Premier Oil (PMO) 181.30p -3.72%
AO World (AO.) 274.90p -3.54%
Aveva Group (AVV) 1,357.00p -3.14%
Riverstone Energy Limited (RSE) 867.00p -3.13%
IP Group (IPO) 212.10p -2.97%
Ophir Energy (OPHR) 127.80p -2.81%
Foxtons Group (FOXT) 155.10p -2.64%