London midday: Stocks extend losses amid recession worries

London stocks had extended losses by midday on Thursday as concerns about a US recession dented the mood.

The FTSE 100 was down 0.9% at 7,762.39.

Richard Hunter, head of markets at Interactive Investor, said: "Markets succumbed to a bout of profit taking as fresh economic data reignited recessionary concerns.

"A disappointing retail sales release in the US set the tone, particularly given the importance of the consumer to economic growth, with department store sales dropping by 6.6% and online sales by 1.1%. Producer prices and factory production also declined, which on other days might have prompted hopes that the Federal Reserve would be seeing increasing reasons to lessen its aggressive monetary stance.

"However, despite the signs of cooling inflation and dampening demand, the Fed reiterated its stance yet again for a likely terminal rate of over 5%, with the next rate decision in February expected to result in a further hike of 0.25%."

Investors were also mulling the latest survey from the Royal Institution of Chartered Surveyors, which showed that house prices fell sharply in December, with weakness forecast to continue well into 2023.

The national house price net balance tumbled to -42 in December, from -26 in December. The balance measures the difference between the percentage of surveyors seeing rises and falls in house prices.

It was the lowest reading since autumn 2010, and well below the -30 analysts had been expecting.

Demand remained subdued, with a net balance for new buyer enquiries of -39, largely in line with November’s -38, while the number of new properties coming to market fell to -23, the weakest reading since September 2021.

The agreed sales balance was -41, against -36 in November.

Simon Rubinsohn, chief economist at RICS, said: "The latest survey highlights the emerging challenges in the housing market as new buyers grapple with more costly finance terms and uncertainty over the outlook for the economy.

"This is reflected in forward-looking RICS indicators around both prices and activity."

In UK equities, heavily-weighted miners were among the worst performers as copper prices fell, with Antofagasta, Glencore and Anglo American all down, while oil giants BP and Shell gushed lower as crude prices retreated.

Precious metals miner Fresnillo lost its shine after a downgrade to ‘sell’ from ‘neutral’ at UBS. "We are constructive on gold/silver-but see risks for Fresnillo into 4Q/FY22 results as consensus costs estimates are too low and silver guidance may disappoint," it said.

Dr Martens tumbled as the iconic bootmaker warned on full-year profits, saying it had been hit by operational issues at its Los Angeles distribution centre and weaker trading in the US direct-to-consumer segment.

Investment platform AJ Bell was in the red even as it posted a rise in customer numbers and assets under management, as the shares traded without entitlement to the dividend.

Homewares retailer Dunelm slumped despite saying that annual profits were set to be above expectations as consumers sought value for money amid the cost-of-living crisis.

Network International slid as it posted a jump in fourth-quarter revenues but warned of increasing headwinds for 2023. The firm said that while the outlook for 2023 remained strong, it faced "more challenging economic and inflationary impacts", including slowing growth in some African markets.

On the upside, Auto Trader gained after an upgrade to 'buy' at Goldman Sachs.

Informa ticked higher after the academic publisher and events specialist said full-year numbers were set to come in ahead of expectations, following strong performances across the business.

Market Movers

FTSE 100 (UKX) 7,762.39 -0.87%
FTSE 250 (MCX) 19,668.32 -1.12%
techMARK (TASX) 4,479.04 -0.49%

FTSE 100 - Risers

Diageo (DGE) 3,710.00p 1.16%
Auto Trader Group (AUTO) 572.40p 0.99%
Admiral Group (ADM) 2,152.00p 0.99%
Coca-Cola HBC AG (CDI) (CCH) 1,935.00p 0.83%
British American Tobacco (BATS) 3,094.00p 0.77%
Imperial Brands (IMB) 2,041.00p 0.69%
Reckitt Benckiser Group (RKT) 5,874.00p 0.69%
Unilever (ULVR) 4,121.50p 0.65%
BAE Systems (BA.) 842.40p 0.60%
GSK (GSK) 1,418.40p 0.60%

FTSE 100 - Fallers

Fresnillo (FRES) 896.60p -4.80%
Antofagasta (ANTO) 1,716.00p -4.64%
Ocado Group (OCDO) 732.80p -3.81%
Anglo American (AAL) 3,554.00p -3.23%
Glencore (GLEN) 558.30p -3.17%
Persimmon (PSN) 1,414.00p -3.15%
Barclays (BARC) 177.14p -2.72%
Taylor Wimpey (TW.) 114.50p -2.64%
Berkeley Group Holdings (The) (BKG) 4,252.00p -2.52%
BP (BP.) 474.40p -2.43%

FTSE 250 - Risers

Workspace Group (WKP) 500.50p 1.36%
Indivior (INDV) 1,974.00p 1.02%
Bank of Georgia Group (BGEO) 2,660.00p 0.95%
TBC Bank Group (TBCG) 2,190.00p 0.92%
PureTech Health (PRTC) 279.50p 0.90%
Direct Line Insurance Group (DLG) 173.75p 0.87%
Apax Global Alpha Limited (APAX) 178.60p 0.79%
Bluefield Solar Income Fund Limited (BSIF) 139.00p 0.72%
Sequoia Economic Infrastructure Income Fund Limited (SEQI) 87.80p 0.69%
Auction Technology Group (ATG) 738.00p 0.68%

FTSE 250 - Fallers

Dr. Martens (DOCS) 155.80p -25.53%
Network International Holdings (NETW) 288.40p -8.85%
AJ Bell (AJB) 344.00p -7.08%
ASOS (ASC) 707.00p -7.03%
Energean (ENOG) 1,276.00p -5.34%
Tullow Oil (TLW) 37.02p -5.17%
TUI AG Reg Shs (DI) (TUI) 182.05p -4.41%
Molten Ventures (GROW) 387.20p -4.11%
JTC (JTC) 725.00p -4.10%
Hochschild Mining (HOC) 79.00p -4.07%