London midday: Stocks fall as oil giants slump, ahead of busy week

London stocks had fallen into the red by midday on Monday, with energy issues under the cosh, as investors eyed key earnings releases this week and the Autumn Budget.

The FTSE 100 was down 0.3% at 8,222.16.

Kathleen Brooks, research director at XTB, said: "The next two weeks feel like they will determine the future direction of risk sentiment and consumer and business confidence for the rest of 2024 and beyond. Event risk is huge, there is a hotly anticipated UK budget this week, in the US, Q3 GDP is released and US payrolls for October are scheduled for release this coming Friday.

"Next week the US Presidential election takes place on Tuesday, after that there are two key central bank meetings on Thursday 7th November: the Bank of England and the FOMC meeting in the US, both central banks are expected to cut rates when they meet next week. There are also plenty of earnings reports due. However, stocks have opened the week on a high. This is a reminder that we will soon get clarity about the future of the UK’s tax changes and the outcome of the US election, which is good news for investors."

Investors were looking ahead to results from five of the "Magnificent Seven" across the pond, with earnings due this week from Alphabet, Meta, Microsoft, Amazon and Apple.

Tesla reported last week, while Nvidia is scheduled to report in November.

In equity markets, BP and Shell gushed lower as oil prices fell after Israel’s retaliatory missile strikes on Iran avoided its oil infrastructure. Brent crude was down more than 4%.

Third-quarter results are due this week from both oil majors.

The drop in oil prices provided a boost to airlines, however, with easyJet, BA parent IAG and Wizz all flying higher.

Lloyds Bank and Close Brothers were under the cosh again following heavy losses on Friday, after a Court of Appeal ruing last week sided with consumers in a row over commissions earned by companies providing car finance loans.

Lloyds said on Monday that it was assessing the implications of the ruling, which set a new standard for motor dealers acting as credit brokers, requiring them to disclose commissions paid by lenders more comprehensively to customers.

Close Brothers said on Friday that it was planning to appeal the ruling. A case was brought against the company by Amy Hopcraft.

Danni Hewson, head of financial analysis at AJ Bell, said: "Lloyds was in damage control mode on Monday morning after Friday’s ruling on motor finance commission arrangements at the Court of Appeal potentially broadened the scope of the scandal.

"This will increase nervousness ahead of the FCA’s own probe into the issue and potentially prolong the agony for Lloyds and the other names affected. If the regulator does adopt a wider lens thanks to this latest ruling then the results of its investigation may well come in later than May, which was when a judgement had been expected.

"For now, Lloyds has put out what is very much a holding statement, with the shares only showing limited damage this morning after a more meaningful slump on Friday afternoon. It will be telling to see if the company proactively increases any provisions made for compensating customers, although given the remaining uncertainties quantifying the impact will be tricky.

"While Lloyds is not a participant in the Court of Appeal case, it is notable that those which are, including Close Brothers, intend to further appeal this latest ruling at the UK Supreme Court. All told, any glow from Lloyds’ better-than-expected quarterly numbers last week has well and truly disappeared."

TBC Bank and Bank of Georgia both tumbled after the ruling Georgian Dream party, which is aligned with Russia, won a contested election at the weekend.

Computacenter fell as it downgraded its full-year profit guidance after a softer-than-expected end to the third quarter.

Trainline surged as it raised its full-year growth guidance after a strong first half. The company said it expects net ticket sales to increase by 12-14% in the year to 28 February 2025, up from a previous target of 8-12% growth, while revenue growth is tipped to be 11-13%, up from 7-11% previously.

Plus500 nudged up as the online CFD trading platform said it benefited from continued investments to attract new customers in the third quarter, reporting a double-digit increase in revenue, but with falling margins keeping a lid on profit growth.

Market Movers

FTSE 100 (UKX) 8,222.16 -0.32%
FTSE 250 (MCX) 20,774.23 -0.22%
techMARK (TASX) 4,718.17 -0.47%

FTSE 100 - Risers

easyJet (EZJ) 516.60p 1.97%
Halma (HLMA) 2,507.00p 1.54%
International Consolidated Airlines Group SA (CDI) (IAG) 213.70p 1.04%
Compass Group (CPG) 2,535.00p 0.96%
Haleon (HLN) 378.00p 0.91%
Informa (INF) 827.40p 0.90%
Smith & Nephew (SN.) 1,097.00p 0.83%
Relx plc (REL) 3,674.00p 0.82%
Rio Tinto (RIO) 5,063.00p 0.82%
Persimmon (PSN) 1,586.00p 0.76%

FTSE 100 - Fallers

Lloyds Banking Group (LLOY) 55.96p -2.95%
Shell (SHEL) 2,490.00p -2.37%
Barclays (BARC) 236.05p -2.22%
BP (BP.) 396.05p -2.19%
Centrica (CNA) 121.70p -1.26%
Smurfit Westrock (DI) (SWR) 3,504.00p -1.16%
Whitbread (WTB) 3,255.00p -1.15%
GSK (GSK) 1,434.50p -0.97%
AstraZeneca (AZN) 11,498.00p -0.93%
Hiscox Limited (DI) (HSX) 1,100.00p -0.90%

FTSE 250 - Risers

Trainline (TRN) 367.60p 9.08%
Energean (ENOG) 983.00p 3.31%
Asia Dragon Trust (DGN) 437.00p 3.07%
Carnival (CCL) 1,499.00p 2.92%
Pets at Home Group (PETS) 306.00p 1.86%
Breedon Group (BREE) 438.00p 1.51%
Wizz Air Holdings (WIZZ) 1,345.00p 1.43%
Spectris (SXS) 2,592.00p 1.33%
Bakkavor Group (BAKK) 157.00p 1.29%
PPHE Hotel Group Ltd (PPH) 1,200.00p 1.27%

FTSE 250 - Fallers

TBC Bank Group (TBCG) 2,550.00p -11.15%
Close Brothers Group (CBG) 248.80p -10.05%
Bank of Georgia Group (BGEO) 3,750.00p -6.25%
Harbour Energy (HBR) 265.60p -3.03%
Abrdn (ABDN) 136.80p -2.98%
Raspberry PI Holdings (RPI) 355.20p -2.68%
Bloomsbury Publishing (BMY) 736.00p -2.39%
Centamin (DI) (CEY) 164.00p -2.32%
Hochschild Mining (HOC) 233.50p -2.30%
Ithaca Energy (ITH) 103.20p -2.27%