London midday: FTSE falls after China equities reach 13-month lows

London stocks were under the cosh on Tuesday after equities in China plunged to 13-month lows as concerns about the slowdown in the nation’s economy weighed on investor sentiment.

The Shanghai Composite Index fell 6.4% to 2,749.79 at the close, dragging down the rest of Asian stocks, amid worries that capital outflows will accelerate as the economy slows and the yuan devalues. The falls came despite the People’s Bank of China flooding the system with cash to keep borrowing costs in check ahead of the Lunar Holiday.

“With days like today continuing to come back to haunt the Shanghai Composite Index, the Chinese New Year period and the trading break couldn’t come soon enough,” said FXTM research analyst Lukman Otunuga.

Meanwhile, oil prices recovered slightly after falling below $30 per barrel in morning trade. At 1154 GMT, Brent crude rose 1.0% to $30.81 per barrel and West Texas Intermediate increased 0.59% to $30.52 per barrel.

“A subsequent recovery in large swathes of the oil and mining sectors has seen the UK index shrink its losses from around 1.5% at the start of the day to a less worrisome 0.7% drop,” said Connor Campbell, financial analyst at Spreadex.

“That does mean, however, that the FTSE still has nearly lost all of the gains it made last Friday, and in danger of matching the lows hit last week if this current losing trend continues across the next few days.”

In economic data, the only notable releases due on Tuesday are in the US with the house price index at 1400 GMT, the S&P Shiller Composite at 1400 GMT, Markit’s services purchasing mangers’ index at 1445 GMT, the consumer confidence report at 1500 GMT and the Richmond Fed manufacturing index at 1500 GMT.

On the company front, shares in Tesco gained despite the UK watchdog finding the supermarket “seriously breached” a legally-binding code to protect suppliers by prioritising its own finances rather than treating its suppliers fairly.

easyJet flew lower after saying the Sharm el-Sheikh disaster and the Paris attacks hurt revenues in the three months to 31 December.

PZ Cussons tumbled after reporting a dip in reported revenue and drop in pre-tax profit, reflecting foreign exchange headwinds.

Dixons Carphone slumped after lifting profit guidance slightly above consensus forecasts and saying it will go ahead with the full roll-out of stores in the US. The group reported like-for-like sales were up 5% in the third-quarter, with an all-time record day on Black Friday as the FTSE 100 electronics retailer said it now expected profit before tax to range between £440m and £450m for the full year.

Crest Nicholson gained after the housebuilder beat profit expectations for the full year on sales revenues rising 26% to £804.8m and said it was confident of meeting its target of £1bn for the new financial year.

Carpetright shares fell to 12-month lows in early trade after management cut profit margin guidance and revealed sales slowed in recent weeks.

Market Movers

FTSE 100 (UKX) 5,847.37 -0.50%
FTSE 250 (MCX) 16,084.80 -0.39%
techMARK (TASX) 3,099.73 -0.63%

FTSE 100 - Risers

Anglo American (AAL) 243.20p 7.33%
Glencore (GLEN) 84.88p 4.98%
Fresnillo (FRES) 678.00p 3.04%
Royal Bank of Scotland Group (RBS) 257.20p 2.35%
Randgold Resources Ltd. (RRS) 4,691.00p 2.07%
Lloyds Banking Group (LLOY) 64.26p 1.77%
Rio Tinto (RIO) 1,631.00p 1.37%
GlaxoSmithKline (GSK) 1,417.00p 1.21%
Antofagasta (ANTO) 367.50p 1.18%
Pearson (PSON) 763.50p 0.93%

FTSE 100 - Fallers

Kingfisher (KGF) 315.20p -2.69%
Mondi (MNDI) 1,160.00p -2.68%
Provident Financial (PFG) 2,843.00p -2.54%
easyJet (EZJ) 1,591.00p -2.45%
BT Group (BT.A) 459.80p -2.38%
Sainsbury (J) (SBRY) 227.10p -1.94%
Intu Properties (INTU) 289.00p -1.80%
Next (NXT) 6,690.00p -1.62%
Relx plc (REL) 1,170.00p -1.60%
Ashtead Group (AHT) 954.50p -1.60%

FTSE 250 - Risers

TalkTalk Telecom Group (TALK) 206.40p 8.63%
Tullow Oil (TLW) 150.80p 7.48%
Acacia Mining (ACA) 187.40p 5.88%
Marston's (MARS) 159.50p 5.84%
Crest Nicholson Holdings (CRST) 540.00p 5.37%
OneSavings Bank (OSB) 325.80p 3.82%
Wood Group (John) (WG.) 613.50p 3.63%
Mitchells & Butlers (MAB) 290.10p 3.53%
BGEO Group (BGEO) 1,791.00p 2.52%
Centamin (DI) (CEY) 66.00p 2.33%

FTSE 250 - Fallers

PZ Cussons (PZC) 243.60p -10.96%
Ocado Group (OCDO) 261.40p -3.72%
Fidelity China Special Situations (FCSS) 117.60p -2.89%
Spirax-Sarco Engineering (SPX) 2,899.00p -2.78%
Weir Group (WEIR) 820.50p -2.73%
Aldermore Group (ALD) 204.00p -2.58%
QinetiQ Group (QQ.) 229.30p -2.55%
Henderson Group (HGG) 263.60p -2.37%
Smith (DS) (SMDS) 362.40p -2.27%
Genus (GNS) 1,401.00p -2.23%