London midday: FTSE declines as banking shares fall

UK stocks were in the red on Thursday as concerns about the banking sector escalated and oil prices dipped again.

Banking shares were under pressure, with Barclays the top faller on the FTSE 100, after Societe Generale’s profit warning added to worries about the health of the sector.

SocGen warned on Thursday that it would not achieve its targeted increase in profits this year due to tighter capital requirements and challenging market conditions.

“They weren’t alone; arguably the stock that kicked off the week’s woeful trading, Deutsche Bank has lost a huge chunk of yesterday’s market-lifting rebound with a 7% plunge this morning,” said Connor Campbell, financial analyst at Spreadex.

Deutsche Bank’s shares plunged early in the week after the lender was forced to assure the market that its balance sheet was “rock solid”. Its stock recovered on Wednesday on news that it will implement an emergency bond buyback plan, but the rebound was short-lived with shares falling again the next day.

Dropping oil prices also continued to weigh on markets. Brent crude fell 1.7% to $30.31 per barrel and West Texas Intermediate tumbled 3.9% to $26.41 per barrel at 1128 GMT.

Investors also continued to digest remarks from Federal Reserve Janet Yellen on Wednesday. She said in a prepared speech that financial conditions have become less supportive of economic growth, the slowdown in China could weigh further on the US and the outlook for inflation is falling.

Yellen’s remarks on China saw stocks in Asian markets close lower on Thursday.

The central bank chair is due to speak again at 1500 GMT, appearing before the Senate Banking Committee.

In economic data, RICS house price balance held steady at +49% in January, slightly below expectations of +52%. “The pronounced imbalance between housing demand and active supply continues to point to rapid gains in house prices,” said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.

Still to come, initial jobless claims figures are due at 1330 GMT.

On the company front, Centrica’s shares slid after the company said it will cut gas prices for customers by 5.1%.

Glencore was sitting lower after agreeing a $500m gold and silver streaming deal from its Antapaccay mine in Peru to help ease its balance sheet woes.

Rio Tinto was on the back foot after reporting a 27% drop in full year revenue, hurt by falling commodities prices.

Tate & Lyle declined after reporting lower margins and continuing difficulties in the ethanol market in the third quarter.

DCC rallied after saying operating profit in the third quarter to the end of December was “very significantly ahead” of the previous year, with excellent growth in the energy, healthcare and environment units.

Workspace gained after announcing the disposal of five light industrial buildings for £64m, a 12% premium to the September 2015 valuation.

Enterprise Inns rose as it posted a 1.6% increase in like-for-like net income in its leased and tenanted estate for the 19 weeks to 6 February 2016.

Dairy Crest slumped after saying the final net proceeds of the disposal of its dairy business on Boxing Day were now expected to be around £30m before costs, lower than previous guidance.

Market Movers

FTSE 100 (UKX) 5,552.65 -2.11%
FTSE 250 (MCX) 15,242.47 -1.74%
techMARK (TASX) 2,887.91 -1.69%

FTSE 100 - Risers

Randgold Resources Ltd. (RRS) 6,060.00p 6.32%
Fresnillo (FRES) 881.50p 6.20%
DCC (DCC) 5,100.00p 1.69%
London Stock Exchange Group (LSE) 2,186.00p 0.32%
Imperial Brands (IMB) 3,513.00p -0.16%
SABMiller (SAB) 4,134.50p -0.37%
AstraZeneca (AZN) 3,992.50p -0.41%
Persimmon (PSN) 1,902.00p -0.52%
GlaxoSmithKline (GSK) 1,351.50p -0.55%
United Utilities Group (UU.) 898.50p -0.55%

FTSE 100 - Fallers

Aberdeen Asset Management (ADN) 212.10p -6.15%
Glencore (GLEN) 87.89p -6.00%
Barclays (BARC) 149.80p -5.79%
BP (BP.) 313.75p -4.95%
Prudential (PRU) 1,118.50p -4.85%
Standard Chartered (STAN) 387.70p -4.84%
Smiths Group (SMIN) 871.50p -4.70%
Ashtead Group (AHT) 762.00p -4.57%
Anglo American (AAL) 312.25p -4.51%
Hargreaves Lansdown (HL.) 1,113.00p -4.30%

FTSE 250 - Risers

Centamin (DI) (CEY) 79.95p 5.89%
Acacia Mining (ACA) 245.10p 4.97%
Informa (INF) 612.50p 3.81%
Enterprise Inns (ETI) 75.10p 3.23%
Zoopla Property Group (WI) (ZPLA) 220.20p 2.99%
Workspace Group (WKP) 731.50p 1.95%
Northgate (NTG) 333.70p 1.74%
Jimmy Choo (CHOO) 132.00p 1.23%
Polymetal International (POLY) 610.50p 1.08%
Shawbrook Group (SHAW) 264.50p 0.99%

FTSE 250 - Fallers

AL Noor Hospitals Group (ANH) 831.00p -28.85%
Interserve (IRV) 373.90p -12.02%
Tate & Lyle (TATE) 535.00p -8.00%
Amec Foster Wheeler (AMFW) 334.80p -7.97%
Drax Group (DRX) 215.50p -5.23%
Allied Minds (ALM) 285.00p -5.00%
Henderson Group (HGG) 234.30p -4.95%
Atkins (WS) (ATK) 1,225.00p -4.89%
Petrofac Ltd. (PFC) 678.00p -4.71%
Victrex plc (VCT) 1,355.00p -4.58%