London midday: Stocks slide as oil prices plunge below $30

London stocks were on the back foot on Friday after weak UK construction data, a drop in oil prices and another fall in Asia stocks.

UK construction output unexpectedly dropped in November from the previous month, according to figures released by the Office for National Statistics. Output fell 0.5%, its biggest decline since May 2013 and well short of economists’ expectations for a 0.5% increase. Output had edged up 0.2% in October.

Howard Archer, chief European and UK economist at IHS Global Insight said: “Another blow to hopes that UK GDP growth picked up in the fourth quarter of 2015 as construction output disappointing fell 0.5% month-on-month in November. This follows on from the even more damaging news that industrial production fell 0.7% month-on-month in November.”

Meanwhile, oil prices reversed the previous session’s gains amid concerns about an oversupply in the market, falling below $30. Brent crude plunged 4% to $29.69 per barrel and West Texas Intermediate tumbled 5.3% to $29.62 per barrel at 1130 GMT.

“Every time oil falls to another big figure there’s a little bit less of a reason to sell but it’s hard to see many reasons to buy,” said Jasper Lawler, market analyst at CMC Markets.

Elsewhere, China entered a bear market as the Shanghai Composite Index closed down 3.5%, falling more than 20% from its December high, amid concerns about the volatility in the yuan. The index was also weighed down by a report that some banks in Shanghai have suspended the acceptance of shares from smaller listed companies as collateral for loans.

“Interventions by Chinese authorities are beginning to wane and lack effect as the cycle of capital outflows, weaker yuan and general volatility undermines investor confidence globally,” said Brenda Kelly, head of analysts at London Capital Group.

The People’s Bank of China set the yuan at 6.5637 to the dollar, marking the sixth-straight session it has guided the currency roughly steady. The yuan traded at 6.6162 to the dollar in the freely traded offshore market, up 0.3% from the previous day. Onshore, where the currency can trade up or down 2% from the PBoC’s daily fix, the yuan traded at 6.5866, broadly unchanged from the previous day.

Still to come, US retail sales figures at 1330 GMT are expected to show a 0.1% decline in December. US industrial and manufacturing production reports are due at 1415 GMT while the University of Michigan’s consumer confidence index for January will be released at 1500 GMT.

Federal Reserve policymaker William Dudley will speak in New Jersey at 1400 GMT and fellow Fed official Fred Kaplan speaks in Dallas at 1800 GMT.

In company news, BHP Billiton slumped after saying it expects to book a $7.2bn (£5m) impairment charge on the value of its onshore US assets in its half-year results due to the steep drop in oil prices.

Fellow miners Anglo American, Rio Tinto and Antofagasta also declined on China worries while oil producers Royal Dutch Shell and Tullow Oil were hit by the drop in crude prices.

Bovis Homes advanced after saying that it expects to report a "significant" increase in 2015 revenue and pre-tax profit following a record number of legal completions and a big jump in prices.

Tate & Lyle gained following an encouraging capital markets day. Liberum reiterated its ‘buy’ rating on the stock, saying it laid out credible plans to deliver its ambition to transform the group into a materially Speciality Food Ingredients-focused business by 2020.

Experian jumped after reiterating expectations for growth in full year earnings.

Shire rallied after chief executive Flemming Ornskov revealed that the drug developer's internal plans for the merger with Baxalta are much more positive than it set out publicly.

Market Movers

FTSE 100 (UKX) 5,832.75 -1.44%
FTSE 250 (MCX) 16,228.80 -1.12%
techMARK (TASX) 3,089.92 -0.88%

FTSE 100 - Risers

Shire Plc (SHP) 4,248.00p 2.86%
Experian (EXPN) 1,145.00p 1.15%
Next (NXT) 6,735.00p 0.97%
Merlin Entertainments (MERL) 410.40p 0.91%
Randgold Resources Ltd. (RRS) 4,249.00p 0.47%
Compass Group (CPG) 1,136.00p 0.18%
SABMiller (SAB) 4,071.50p 0.17%
Direct Line Insurance Group (DLG) 368.40p -0.03%
Kingfisher (KGF) 334.10p -0.03%
CRH (CRH) 1,828.00p -0.11%

FTSE 100 - Fallers

Anglo American (AAL) 236.15p -10.19%
Glencore (GLEN) 72.42p -7.89%
BHP Billiton (BLT) 614.20p -6.51%
Antofagasta (ANTO) 354.30p -4.99%
Hargreaves Lansdown (HL.) 1,239.00p -4.91%
Rio Tinto (RIO) 1,650.00p -4.90%
Aberdeen Asset Management (ADN) 223.60p -3.83%
Old Mutual (OML) 153.50p -3.40%
Tesco (TSCO) 162.40p -3.33%
Royal Dutch Shell 'A' (RDSA) 1,350.00p -2.98%

FTSE 250 - Risers

Tate & Lyle (TATE) 608.50p 4.28%
AA (AA.) 293.40p 3.09%
AO World (AO.) 155.60p 2.37%
Card Factory (CARD) 352.70p 2.05%
Senior (SNR) 212.00p 1.87%
Indivior (INDV) 166.70p 1.77%
Mitie Group (MTO) 290.30p 1.43%
Dechra Pharmaceuticals (DPH) 1,027.00p 1.38%
Bwin.party Digital Entertainment (BPTY) 125.20p 1.38%
Caledonia Investments (CLDN) 2,300.00p 1.32%

FTSE 250 - Fallers

Moneysupermarket.com Group (MONY) 319.00p -9.17%
Tullow Oil (TLW) 128.40p -7.49%
Pendragon (PDG) 43.10p -6.81%
Jupiter Fund Management (JUP) 393.20p -6.49%
Amec Foster Wheeler (AMFW) 377.30p -5.44%
Polymetal International (POLY) 529.50p -5.02%
Vedanta Resources (VED) 229.10p -4.94%
Cairn Energy (CNE) 131.90p -4.28%
Just Eat (JE.) 428.50p -4.16%
Evraz (EVR) 60.90p -3.94%