London midday: Stocks fall as Citigroup cuts FTSE 100 year-end target

London stocks fell as Citigroup cut its 2015 year-end target for the FTSE 100 to 6900 from 7400 following downgrades to economic growth and the rising risk from China.

The bank said the new target still suggests around 10% returns to year end, adding that it expects a fourth quarter rally to be supported by a combination of modest growth and re-rating following the recent correction.

Citi said while UK equities have returned 135% since March 2009 lows versus 44% from UK gilts and 3% from UK cash, returns have been more disappointing the past few months.

Still, it said the recent correction is not the beginning of a new equity bear market. “A bear market, we think, needs a global recession. With European and US economies enjoying modest growth, supported by domestic demand and backstopped by easy money, the shock from China/EM needs to be severe to drive a global recession.”

Tuesday data

Meanwhile, in economic data, Halifax revealed UK house prices fell 0.9% in September from August when prices rose 2.7%. Analysts had pencilled in a 0.1% gain. Compared to a year ago, prices slowed to 8.6% growth in the three months to September, compared to a previous 9% increase and analysts’ forecasts of 9.1% growth.

Germany’s factory orders fell 1.8% month-on-month in August, marking the second successive month of a decline following a 2.2% drop in July, Destatis revealed. The figure was well short of the expected 0.5% increase.

Retail sales in the Eurozone grew for the fifth consecutive month in September, Markit showed. The purchasing managers’ index rose to 51.9 from 51.4 in August, above the 50 level that separates an expansion from a contraction.

Still to come, the US will see the release of its trade balance figures while Federal Reserve official John Williams will speak in California after the close. Williams has called for an interest rate hike this year but the market will be looking to see if Friday’s weak US non-farm payrolls report has changed his mind.

On the company front, SABMiller slumped after reporting a 9% decline in revenue on a reported basis for the six months to 30 September, reflecting currency headwinds. Bloomberg reported that the company has rejected an informal takeover offer from Anheuser-Busch InBev that it considered too low.

Ted Baker was also in the red despite reporting a better-than-expected 24.5% jump in half-year revenue and a 14.6% increase in pre-tax profit to £17.8m in line with estimates.

Acacia Mining tumbled after the miner revealed its production in the third quarter was weaker than expected and lowered its full-year guidance.

Other mining stocks including Glencore, Anglo American and Antofagasta were dragged lower by a drop in copper prices.

Going the other way, Greggs surged after saying it sales in the 13 weeks to October were slightly ahead of expectations with the full year likely to be ahead of previous guidance.

Market Movers

techMARK 3,069.12 -0.45%

FTSE 100 6,301.73 +0.04%

FTSE 250 17,118.80 +0.05%

FTSE 100 - Risers

Morrison (Wm) Supermarkets (MRW) 171.90p +2.20%

Burberry Group (BRBY) 1,429.00p +1.64%

International Consolidated Airlines Group SA (CDI) (IAG) 593.50p +1.54%

3i Group (III) 494.10p +1.50%

Wolseley (WOS) 3,802.00p +1.49%

Travis Perkins (TPK) 2,009.00p +1.46%

Carnival (CCL) 3,484.00p +1.28%

Royal Dutch Shell 'A' (RDSA) 1,710.00p +1.21%

Aberdeen Asset Management (ADN) 326.60p +1.18%

Tesco (TSCO) 188.75p +1.18%

FTSE 100 - Fallers

Glencore (GLEN) 111.35p -3.17%

SABMiller (SAB) 3,657.50p -2.83%

ARM Holdings (ARM) 947.00p -1.66%

Anglo American (AAL) 571.40p -1.40%

Antofagasta (ANTO) 530.00p -1.40%

Hikma Pharmaceuticals (HIK) 2,332.00p -1.40%

Centrica (CNA) 226.90p -1.35%

SSE (SSE) 1,535.00p -1.10%

Shire Plc (SHP) 4,555.00p -1.06%

Aviva (AV.) 471.50p -0.90%

FTSE 250 - Risers

Greggs (GRG) 1,147.00p +6.60%

AL Noor Hospitals Group (ANH) 957.00p +4.13%

Ocado Group (OCDO) 350.60p +4.00%

International Personal Finance (IPF) 415.00p +3.39%

Brewin Dolphin Holdings (BRW) 259.60p +2.41%

PZ Cussons (PZC) 305.00p +2.04%

Man Group (EMG) 164.40p +1.99%

Amec Foster Wheeler (AMFW) 782.00p +1.96%

Bank of Georgia Holdings (BGEO) 1,854.00p +1.87%

Indivior (INDV) 235.00p +1.78%

FTSE 250 - Fallers

Acacia Mining (ACA) 225.20p -13.48%

BTG (BTG) 601.00p -9.35%

Ted Baker (TED) 3,143.00p -4.12%

Drax Group (DRX) 251.90p -3.93%

Ophir Energy (OPHR) 96.15p -2.88%

Betfair Group (BET) 3,280.00p -2.58%

Playtech (PTEC) 786.50p -2.48%

Polymetal International (POLY) 579.00p -1.86%

Aggreko (AGK) 1,003.00p -1.67%

Card Factory (CARD) 377.00p -1.62%

FTSE TechMARK - Risers

E2V Technologies (E2V) 240.00p +2.35%

Oxford Instruments (OXIG) 617.50p +2.32%

Oxford Biomedica (OXB) 7.90p +2.07%

Torotrak (TRK) 6.86p +1.19%

NCC Group (NCC) 276.00p +0.36%

Spirent Communications (SPT) 76.00p +0.33%

KCOM Group (KCOM) 91.50p +0.27%

Dialight (DIA) 665.00p +0.08%

FTSE TechMARK - Fallers

Sarossa (SARS) 1.82p -4.71%

BATM Advanced Communications Ltd. (BVC) 19.50p -2.50%

XP Power Ltd. (DI) (XPP) 1,650.00p -1.49%

Skyepharma (SKP) 340.00p -1.45%

Innovation Group (TIG) 39.25p -0.63%

Sepura (SEPU) 173.75p -0.57%

Ricardo (RCDO) 884.50p -0.39%

IShares Euro Gov Bond 7-10YR UCITS ETF (IEGM) € 202.93 -0.28%

SDL (SDL) 366.00p -0.20%

Consort Medical (CSRT) 929.00p -0.11%