London midday: Stocks fall ahead of OPEC meeting, Trump and Clinton debate

London stocks declined on Monday as investors awaited an OPEC meeting in Algeria and a debate later in the day between Hillary Clinton and Donald Trump.

Oil prices rose after Algeria’s energy minister Noureddine Bouterfa said on Sunday that all options for a production cut or freeze at Monday’s OPEC meeting were on the table. Bouterfa said: "We will not come out of the meeting empty-handed.”

Brent crude rose 1.4% to $46.58 per barrel and West Texas Intermediate increased 1.3% $45.07 per barrel at 1131 BST.

Ahead of the US presidential debate later on Monday, the odds of a Trump win has been raised by forecasters. The face-off between Trump and Clinton has the potential to shape who takes the lead in the polls.

Elsewhere, shares in Deutsche Bank reached their lowest point in 20 years on Monday after German Chancellor Angela Merkel ruled out the prospect of any form of state aid to help the lender with its US legal troubles. The US Justice Department has suggested the bank pay $14bn to settle a number of investigations related to mortgage securities.

Connor Campbell, financial analyst at Spreadex, said: “It’s one of those mornings where investors have woken up with the fear. The fear of a strong Trump performance in the US presidential debate this evening, the fear of more ineptitude from OPEC at their meeting in Algiers later in the weak, the fears of a ‘hard’ Brexit, the fears of further collapse from Deutsche Bank, which has fallen around 6% since the day began.”

Meanwhile, worries over Brexit grew after a survey by CBI and PwC showed optimism among financial services firms during the three months to September dropped for the third consecutive quarter. More than half of the firms surveyed saw the Brexit vote as a negative for the financial services industry.

A separate survey by advisory firm KPMG revealed more than 75% of British business leaders have said they are pondering moving their businesses overseas because of the EU referendum.

Housebuilders were under the cosh after data from the British Banking Association showed loans for house purchases fell to a new 19-month low of 36,997 in August from the revised previous figure of 37,672 a month before. Economists had expected 37,100 loans. Shares in Taylor Wimpey, Barratt Developments and Persimmon dropped.

InterContinental Hotels also slumped as Morgan Stanley downgraded the stock to 'underweight' and trimmed the target price to 3,100p from 3,300p after the shares' recent outperformance and on concerns that the US hotel cycle is peaking.

Lloyds Banking Group was under pressure after Goldman Sachs cut its stance on the lender to ‘sell’ from ‘neutral’ and lowered the price target 6% to 50p as it pointed to increased competition and low rates.

Hays shares fell after RBC Capital Markets downgraded the recruiter to ‘sector perform’ from ‘outperform’ as the stock has performed well and is now near its 140p price target.

Market Movers

FTSE 100 (UKX) 6,834.24 -1.09%
FTSE 250 (MCX) 17,759.56 -0.91%
techMARK (TASX) 3,500.14 -0.75%

FTSE 100 - Risers

Micro Focus International (MCRO) 2,138.00p 0.66%
Informa (INF) 715.50p 0.63%
Burberry Group (BRBY) 1,409.00p 0.57%
National Grid (NG.) 1,080.50p 0.56%
Coca-Cola HBC AG (CDI) (CCH) 1,740.00p 0.40%
SSE (SSE) 1,539.00p 0.33%
GKN (GKN) 324.10p 0.28%
Severn Trent (SVT) 2,473.00p 0.04%
Admiral Group (ADM) 2,087.00p -0.00%
Hammerson (HMSO) 585.00p -0.09%

FTSE 100 - Fallers

InterContinental Hotels Group (IHG) 3,152.00p -4.05%
Lloyds Banking Group (LLOY) 54.00p -3.54%
Taylor Wimpey (TW.) 150.10p -3.47%
Barratt Developments (BDEV) 480.50p -3.36%
Persimmon (PSN) 1,779.00p -3.21%
Pearson (PSON) 736.00p -2.90%
Barclays (BARC) 166.65p -2.77%
International Consolidated Airlines Group SA (CDI) (IAG) 394.80p -2.71%
Antofagasta (ANTO) 503.00p -2.52%
ITV (ITV) 182.00p -2.52%

FTSE 250 - Risers

AO World (AO.) 164.50p 2.36%
Vesuvius (VSVS) 355.00p 1.63%
Morgan Advanced Materials (MGAM) 287.00p 1.63%
Hochschild Mining (HOC) 291.30p 1.57%
NMC Health (NMC) 1,417.00p 1.43%
Millennium & Copthorne Hotels (MLC) 446.50p 1.43%
Vectura Group (VEC) 141.30p 1.29%
Mitchells & Butlers (MAB) 273.70p 1.22%
Beazley (BEZ) 396.00p 1.10%
Homeserve (HSV) 567.00p 1.07%

FTSE 250 - Fallers

Thomas Cook Group (TCG) 68.55p -6.10%
Sports Direct International (SPD) 286.60p -5.35%
Shawbrook Group (SHAW) 236.10p -4.99%
Bovis Homes Group (BVS) 835.50p -4.46%
Redrow (RDW) 392.70p -3.82%
Crest Nicholson Holdings (CRST) 447.00p -3.50%
Fidessa Group (FDSA) 2,382.00p -3.01%
Hays (HAS) 129.70p -2.99%
Berkeley Group Holdings (The) (BKG) 2,545.00p -2.97%
OneSavings Bank (OSB) 258.50p -2.97%