London midday: Stocks slide as oil prices fall and Osborne warns on Brexit

London stocks were in the red on Monday as oil prices declined after weekend talks between global producers collapsed.

Members and non-members of the Organization of the Petroleum Exporting Countries held talks in Doha on Sunday but failed come to an agreement to freeze oil production to address the supply glut, which has been weighing on prices.

The talks fell apart after Saudi Arabia reiterated that it would not cap output unless Iran agreed to do the same. Iran, which did not attend the negotiations, has been reluctant to come to such an agreement since it has recently been relieved of sanctions.

Brent crude fell 2.2% to $42.17 per barrel and West Texas Intermediate dropped 2.6% to $39.30 per barrel at 1147 BST.

Investors shrugged off news that Kuwait’s crude production dropped more than half on Sunday as thousands of its oil industry employees began an open-ended strike over government plans to cut wages. The nation’s output was 1.1 million barrels a day, down from the usual 3 million it produces.

Meanwhile, the Treasury has warned in an analysis that the UK economy would be 6% smaller by 2030 if Britons voted to leave the EU. Chancellor George Osborne added that this would be the equivalent of £4,300 per household. The country is due to vote on “in/out” referendum on June 23.

He said the poorest households would be hit hardest.

"They are the people whose incomes would go down, whose house prices would fall, whose job prospects would weaken, they are the people who always suffer when the country takes an economic wrong turn," he told the BBC.

In company news, oil producers declined on the slide in prices, including Royal Dutch Shell and BP.

However, airlines benefitted from the fall in oil prices including easyJet, TUI and International Consolidated Airlines.

TUI and Thomas Cook were also given a boost by Berenberg which upgraded both stocks. The bank lifted Thomas Cook to ‘hold’ from ‘sell’ and nudged up the price target to 105p from 100p. It upgraded TUI AG to ‘buy’ from ‘hold’ and lifted the price target to 1,300p from 1,275p.

Centrica slumped after saying it expected to axe 3,000 jobs in 2016 as part of its cost-cutting plans, with 800 gone in the first quarter of the year.

Interserve gained after being awarded a five year, £230m contract with the Ministry of Defence Infrastructure Organisation to provide facilities services to the United States Air Force’s UK estate.

Market Movers

FTSE 100 (UKX) 6,329.99 -0.22%
FTSE 250 (MCX) 16,897.60 -0.08%
techMARK (TASX) 3,173.93 -0.03%

FTSE 100 - Risers

TUI AG Reg Shs (DI) (TUI) 1,080.00p 3.75%
BT Group (BT.A) 453.90p 2.23%
easyJet (EZJ) 1,479.00p 2.21%
Reckitt Benckiser Group (RB.) 6,849.00p 1.69%
International Consolidated Airlines Group SA (CDI) (IAG) 542.50p 1.59%
InterContinental Hotels Group (IHG) 2,901.00p 1.40%
Imperial Brands (IMB) 3,790.00p 1.26%
Travis Perkins (TPK) 1,796.00p 1.24%
Worldpay Group (WI) (WPG) 272.10p 1.15%
Carnival (CCL) 3,781.00p 1.15%

FTSE 100 - Fallers

ARM Holdings (ARM) 962.00p -2.83%
Antofagasta (ANTO) 460.00p -2.34%
Centrica (CNA) 233.50p -2.01%
Royal Dutch Shell 'A' (RDSA) 1,781.00p -1.82%
Royal Dutch Shell 'B' (RDSB) 1,789.50p -1.59%
Fresnillo (FRES) 1,005.00p -1.37%
Aviva (AV.) 435.00p -1.32%
Glencore (GLEN) 153.70p -1.25%
BP (BP.) 352.05p -1.10%
Prudential (PRU) 1,380.50p -1.04%

FTSE 250 - Risers

Lancashire Holdings Limited (LRE) 550.00p 3.19%
JRP Group (JRP) 133.60p 2.38%
Rank Group (RNK) 253.00p 2.22%
Dignity (DTY) 2,524.00p 2.14%
Spire Healthcare Group (SPI) 353.80p 2.14%
Acacia Mining (ACA) 317.10p 2.13%
Zoopla Property Group (WI) (ZPLA) 279.90p 2.00%
Cineworld Group (CINE) 557.00p 1.64%
Interserve (IRV) 412.90p 1.60%
International Personal Finance (IPF) 281.20p 1.59%

FTSE 250 - Fallers

Sophos Group (SOPH) 202.70p -3.48%
Millennium & Copthorne Hotels (MLC) 431.20p -3.10%
Evraz (EVR) 129.80p -2.99%
Beazley (BEZ) 320.00p -2.91%
Redrow (RDW) 355.00p -2.63%
Countrywide (CWD) 348.50p -2.13%
Man Group (EMG) 159.10p -2.03%
Vedanta Resources (VED) 381.00p -1.85%
ICAP (IAP) 468.20p -1.76%
Ashmore Group (ASHM) 294.70p -1.70%