London midday: Stocks fall on growing Brexit woes

London stocks declined on Monday as reports about Brexit’s impact on the economy added to concerns.

The FTSE 100 dropped 0.86% to 6,953.25 at the midday mark.

The EY Item Club said Britain faces a prolonged period of weaker growth as consumer spending slows and businesses curb investments.

The think tank expects inflation will rise due to a weaker pound post Brexit, which may prompt consumers to refrain from spending.

Meanwhile, Chancellor Philip Hammond is reportedly butting heads with other ministers during talks about Brexit. According to reports over the weekend, Hammond was threatening to quit over the divisions but the government has since denied the rumour.

“In a cabinet with some hot-headed opinions on Brexit, Mr Hammond is viewed by markets as a cooler cucumber,” said Jasper Lawler, market analyst at CMC Markets.

“His departure and the resulting political uncertainty would likely see another nose-dive in the pound and exacerbate the rise in gilt yields.”

Lawler added: “Mr Hammond is thought to prefer a plan in which migration curbs are delayed and Britain would pay into the EU budget for single market access.

“It’s a stance that would be welcomed by markets but he has been described as “arguing like an account” and “only seeing the risks” by fellow MPs.”

Elsewhere, investors continued to mull over Federal Reserve chair Janet Yellen’s comments last Friday ahead of this Thursday’s European Central Bank rate announcement.

Yellen said in a speech that policymakers need to consider the potential for a “high pressure economy” and let inflation continue to rise. Her comments boosted the dollar, which hit its highest level since March.

Meanwhile, oil prices edged lower after a report from Baker Hughes on Friday showed US drillers added four rigs in the week to 14 October. Brent crude fell 0.01% to $51.94 per barrel and West Texas Intermediate dipped 0.19% to $50.25 per barrel at 1155 BST.

On the corporate front, housebuilders were under pressure on Brexit worries, including Barratt Developments and Persimmon.

Pearson slumped as it reported a 7% drop in sales in the nine months to the end of September.

Ladbrokes shares fell after the company and Coral sold more than 300 betting shops to gambling rivals Betfred and Stan James. Ladbrokes and Coral must sell 350-400 shops for their merger to be cleared by competition regulators.

Market Movers

FTSE 100 (UKX) 6,953.25 -0.86%
FTSE 250 (MCX) 17,808.88 -0.95%
techMARK (TASX) 3,515.92 -0.79%

FTSE 100 - Risers

Glencore (GLEN) 231.90p 1.60%
Rolls-Royce Holdings (RR.) 771.00p 0.85%
Standard Chartered (STAN) 656.90p 0.74%
Anglo American (AAL) 1,011.50p 0.55%
ITV (ITV) 173.40p 0.52%
GKN (GKN) 328.80p 0.18%
Morrison (Wm) Supermarkets (MRW) 220.30p 0.05%
London Stock Exchange Group (LSE) 2,844.00p 0.04%
Travis Perkins (TPK) 1,457.00p 0.00%
Smiths Group (SMIN) 1,480.00p -0.00%

FTSE 100 - Fallers

Pearson (PSON) 741.00p -10.99%
Barratt Developments (BDEV) 469.70p -2.69%
Standard Life (SL.) 328.70p -2.49%
Royal Mail (RMG) 486.00p -2.19%
Next (NXT) 4,508.00p -2.04%
Dixons Carphone (DC.) 323.30p -2.03%
Persimmon (PSN) 1,672.00p -1.99%
Legal & General Group (LGEN) 206.70p -1.94%
Admiral Group (ADM) 1,987.00p -1.92%
Sainsbury (J) (SBRY) 229.20p -1.59%

FTSE 250 - Risers

Drax Group (DRX) 321.00p 3.12%
Grafton Group Units (GFTU) 522.50p 2.35%
Telecom Plus (TEP) 1,129.00p 2.08%
Vedanta Resources (VED) 645.00p 1.57%
Hastings Group Holdings (HSTG) 211.10p 1.00%
Spire Healthcare Group (SPI) 382.80p 1.00%
Ibstock (IBST) 159.20p 0.95%
HarbourVest Global Private Equity Limited A Shs (HVPE) 1,084.00p 0.74%
CLS Holdings (CLI) 1,550.00p 0.65%
Ocado Group (OCDO) 256.00p 0.59%

FTSE 250 - Fallers

PayPoint (PAY) 1,106.00p -5.31%
Debenhams (DEB) 53.00p -3.99%
Countrywide (CWD) 189.70p -3.95%
Supergroup (SGP) 1,436.00p -3.69%
Domino's Pizza Group (DOM) 319.10p -3.42%
Shawbrook Group (SHAW) 230.70p -3.31%
Crest Nicholson Holdings (CRST) 398.90p -3.16%
Rank Group (RNK) 196.70p -3.15%
Bellway (BWY) 2,238.00p -2.86%
G4S (GFS) 234.90p -2.81%