London midday: Oil slump sends equities lower

UK equities slumped on Friday as oil prices continued to fall after the International Energy Agency said it sees the global market as oversupplied until late 2016.

The IEA said the global oil glut was set to worsen in the months ahead as demand slows and OPEC output booms.

More oil will be pushed into storage if Western sanctions on Iran are finally removed, IEA warned.

Brent crude fell 1.6% to $39.09 per barrel and West Texas Intermediate dropped 1.3% to $36.26 per barrel at 1125 GMT.

Oil producers Premier Oil, Royal Dutch Shell and BP declined on the continued pressure on prices.

In economic data, UK construction output rose less than expected in October from a month earlier, the Office for National Statistics revealed.

Output increased 0.2% month-on-month in October, missing expectations for a 1% increase but better than the previous month’s 0%. In comparison to the same month a year earlier construction output gained 1% in October, well ahead of estimates for a 1.1% drop and September’s 0.3%.

Meanwhile, a survey by the Bank of England and GfK revealed consumers’ expectations for inflation of the coming year were unchanged at 2% in November. Expectations for the pace of increases in the cost of living in five years’ time, on the other hand, edged up to 2.9% from 2.8%.

In China, banks issued 708.9 billion yuan ($110.10bn) of new yuan loans in November compared with 513.6 trn yuan in October, the People’s Bank of China revealed. The figure surpassed analysts’ expectations of 600bn yuan.

Still to come, US service activity data is due at 1445 GMT while Federal Reserve official Jeffrey Lacker will give the 2016 economic outlook at the Charlotte Chamber at 1800 GMT.

The Fed is widely expected to raise interest rates for the first time in nearly a decade on 16 December.

In company news, Lonmin plunged after the platinum miner reported a 71% take-up of its heavily-discounted $407m (£269m) right issue.

Standard Chartered edged lower after the Asia-focus lender raised £3.3bn through a rights issue of new stock to boost its balance sheet amid a slowdown in China’s economy.

Anglo American headed south after Moody’s cut its credit rating to “Baa3” from “Baa2” and warned a further downgrade could be on the way.

Old Mutual, which has business in South Africa, declined in the wake of the sacking of the country’s finance minister.

Bellway gained after saying it expects total completions and average selling prices to rise in the full year as it reported an "excellent" start to the current financial year.

Fellow housebuilders Barratt Developments and Taylor Wimpey also rallied as Bellway said the market was strong.

Market Movers

FTSE 100 (UKX) 6,024.73 -1.04%
FTSE 250 (MCX) 16,948.14 -0.77%
techMARK (TASX) 3,160.60 -0.28%

FTSE 100 - Risers

Admiral Group (ADM) 1,617.00p 0.56%
Merlin Entertainments (MERL) 435.30p 0.44%
Associated British Foods (ABF) 3,442.00p 0.17%
Barratt Developments (BDEV) 600.00p 0.17%
GlaxoSmithKline (GSK) 1,316.00p 0.15%
Hikma Pharmaceuticals (HIK) 2,090.00p 0.10%
Ashtead Group (AHT) 1,102.00p 0.09%
International Consolidated Airlines Group SA (CDI) (IAG) 573.50p 0.09%
Taylor Wimpey (TW.) 196.40p 0.00%
Sage Group (SGE) 592.00p -0.00%

FTSE 100 - Fallers

Old Mutual (OML) 159.70p -8.32%
Anglo American (AAL) 303.70p -4.69%
BHP Billiton (BLT) 709.50p -3.23%
Mondi (MNDI) 1,283.00p -2.51%
Burberry Group (BRBY) 1,145.00p -2.47%
Royal Dutch Shell 'B' (RDSB) 1,497.00p -2.38%
GKN (GKN) 288.10p -2.34%
Schroders (SDR) 2,738.00p -2.28%
Glencore (GLEN) 86.87p -2.28%
Pearson (PSON) 720.50p -2.24%

FTSE 250 - Risers

Jimmy Choo (CHOO) 112.50p 6.13%
Bellway (BWY) 2,703.00p 5.22%
Riverstone Energy Limited (RSE) 804.50p 1.84%
Nostrum Oil & Gas (NOG) 376.00p 1.76%
Foxtons Group (FOXT) 182.90p 1.61%
Fidessa Group (FDSA) 1,906.00p 1.60%
Daejan Holdings (DJAN) 6,160.00p 1.57%
Bovis Homes Group (BVS) 987.50p 1.54%
Zoopla Property Group (WI) (ZPLA) 237.60p 1.54%
Stagecoach Group (SGC) 302.40p 1.48%

FTSE 250 - Fallers

International Personal Finance (IPF) 259.80p -19.44%
Premier Oil (PMO) 51.35p -10.15%
Investec (INVP) 433.00p -7.85%
Aldermore Group (ALD) 212.70p -6.18%
Tullow Oil (TLW) 167.30p -5.53%
Telecom Plus (TEP) 1,030.00p -5.07%
Evraz (EVR) 68.85p -4.97%
Vedanta Resources (VED) 297.00p -4.59%
OneSavings Bank (OSB) 366.90p -4.43%
Ocado Group (OCDO) 321.90p -4.14%