London midday: Stocks tumble as oil prices extend losses, data disappoints

Weaker-than-expected data from across the globe and a continued plunge in oil prices meant that there was no let-up in the sell-off for UK equity markets on Friday.

Stocks were falling for the fifth day straight, with shares in the oil and gas sector faring the worst.

London’s FTSE 100 was down a staggering 1.5% at 6,365 by midday, extending its decline over the week to 5.6%.

The index closed Thursday’s session at 6,461.70, its weakest finish since 4 November. If it closes at current levels, it would the Footsie’s lowest close since 27 October.

A raft of economic data was released in China overnight. While retail sales and fixed asset investment figures were largely in line with forecasts, Chinese industrial production growth slowed more than expected from 7.7% to 7.2% year-on-year. The consensus forecast was for an annual increase of 7.5%.

The monthly increase in Eurozone industrial production also slowed down to just 0.1% in October from 0.5% the month before, missing the 0.2% estimate.

Meanwhile, UK construction output unexpectedly dropped by 2.2% over the month of October, erasing September’s 2.2% gain. Analysts had expected growth to slow down to 0.7%.

Oil prices continued to fall on Friday, with West Texas Intermediate extending losses below $60 a barrel. WTI for January delivery fell as low as $58.80 a barrel early on, a level it has not reached since July 2009, while Brent dropped to $62.75.

The downwards pressure on crude prices intensified after the International Energy Agency lowered its forecast for demand in 2015 for the fourth time in five months.

Energy shares continue to fall

Petrofac, Tullow Oil, BP, Shell and a host of stocks exposed to the oil price were suffering heavy losses on Friday.

Oil and gas engineer Weir, however, was bouncing back after recent declines following an upgrade by Canaccord Genuity from ‘hold’ to ‘buy’. The broker said the stock’s valuation now looks “compelling” after having fallen by over a third over the past three months alone.

Utility stocks were mixed with United Utilities and Severn Trent gaining despite Ofwat’s announcement that average water bills will drop by 5% by 2019-2020. However, SSE was lower after it was named as one of the three energy providers being fined a combined £4.6m by Ofgem for failing to meet environmental targets.

Meanwhile, power station group Drax was a heavy faller on the back of plans to change biomass subsidies in the UK. The stock was trading at two-year low.

Shares of telecoms giant BT were lower amid speculation that the firm will soon decide whether it wants to buy Telefonica’s UK mobile network O2 or opt for Orange and Deutsche Telekom’s EE.

Banking stocks were also weaker, with HSBC, Barclays, Standard Chartered, RBS and Lloyds all in the red.

Market Movers
techMARK 2,877.13 -1.24%
FTSE 100 6,365.12 -1.49%
FTSE 250 15,440.42 -1.42%

FTSE 100 - Risers
United Utilities Group (UU.) 895.00p +2.64%
Severn Trent (SVT) 1,931.00p +0.84%
Weir Group (WEIR) 1,701.00p +0.35%
International Consolidated Airlines Group SA (CDI) (IAG) 463.50p +0.32%

FTSE 100 - Fallers
Petrofac Ltd. (PFC) 692.50p -4.35%
Persimmon (PSN) 1,509.00p -4.07%
Rolls-Royce Holdings (RR.) 802.00p -3.55%
Coca-Cola HBC AG (CDI) (CCH) 1,282.00p -3.46%
Hargreaves Lansdown (HL.) 920.50p -3.41%
Tullow Oil (TLW) 362.20p -2.84%
Mondi (MNDI) 1,038.00p -2.72%
St James's Place (STJ) 785.00p -2.54%
Intertek Group (ITRK) 2,166.00p -2.43%
Dixons Carphone (DC.) 425.40p -2.41%

FTSE 250 - Risers
Spirent Communications (SPT) 75.25p +5.69%
Kaz Minerals (KAZ) 255.80p +2.77%
Wood Group (John) (WG.) 584.00p +2.64%
Centamin (DI) (CEY) 50.70p +1.30%
Foxtons Group (FOXT) 157.90p +1.02%
Hochschild Mining (HOC) 86.25p +1.00%
Brit (BRIT) 254.00p +0.95%
Big Yellow Group (BYG) 574.50p +0.79%
Northgate (NTG) 556.50p +0.63%
Personal Assets Trust (PNL) 34,840.00p +0.40%

FTSE 250 - Fallers
Drax Group (DRX) 513.50p -9.03%
Carillion (CLLN) 316.90p -7.88%
EnQuest (ENQ) 33.38p -6.76%
Nostrum Oil & Gas (NOG) 483.50p -5.01%
BlackRock World Mining Trust (BRWM) 299.00p -4.84%
Premier Oil (PMO) 161.20p -4.56%
Supergroup (SGP) 801.00p -4.07%
Bovis Homes Group (BVS) 845.50p -3.81%
Bellway (BWY) 1,824.00p -3.59%
Fenner (FENR) 204.10p -3.59%