London midday: Stocks slide on oil prices, IMF outlook

The FTSE was under pressure on Wednesday as oil prices declined and the International Monetary Fund warned of disappointing global economic growth next year.

Brent crude fell 1.9% to $37.06 per barrel and West Texas Intermediate dropped 2.6% to $36.91 per barrel at 1143 GMT.

Metal prices dropped but mining stocks were in the black at the midday mark including Anglo American, Rio Tinto and Antofagasta.

“With Brent Crude now even closer to falling back below the $37 per barrel mark (only needing to drop around 10 cents to break that barrier with the US crude inventories still to come) the FTSE had a battle on its hands this morning,” said Connor Campbell, financial analyst at Spreadex.

“Yet it has managed to shrink its losses from around 20 to 5 points, the normally hefty weight of its commodity sector lightened by flashes of growth from Anglo American, Antofagasta and Premier Oil.”

Meanwhile, IMF chief Christine Lagarde warned global growth next year would be hurt by a slowdown in emerging economies, the prospect of rising US interest rates, a strong dollar and an aging population.

"In many countries the financial sector still has weaknesses and in emerging markets the financial risks are increasing. All of that means global growth will be disappointing and uneven in 2016," Lagarde said in a guest article for German newspaper Handelsblatt published on Wednesday.

In the UK, a report from Nationwide showed house prices climbed 0.8% month in December compared to November, which was the largest month-on-month increase since April.

Nationwide said this lifted the annual pace of house price growth to 4.5%, a high-month high, from 3.7% in November.

In China, the central bank’s vice governor Yi Gang said there was no basis for continued yuan depreciation, with China capable of keeping the currency stable at a reasonable level, with China's still strong economic growth and foreign exchange reserves major factors that would underpin the currency.

However, increasing arbitrage from the widening gap between the currency’s exchange rates in China and abroad has led to authorities suspending at least two foreign banks from conducting some cross-border yuan business until late March, according to sources cited by Bloomberg.

Elsewhere, Reuters cited PBoC policy advisers who suggested China could run its biggest budget deficit in half a century next year as increased government spending is employed to boost the slowing economy, after a year of monetary policy failed to create the desired results. The government has been advised to expand its budget deficit to roughly 3% of GDP in 2016 from a target of 2.3%, which was said to help ease the pain from plans to tackle oversupply and debt.

In afternoon trade, data on US weekly mortgage applications and US pending home sales are due.

Company-wise, Rolls Royce was in the red after members of the UK parliament were reportedly set to meet the group’s boss Warren East to discuss his restructuring plans for the aerospace and defence group following its five profit warnings.

Supermarkets were under the cosh, including Sainsbury’s and Ocado, on concerns about Amazon’s plans to expand its UK grocery delivery service.

Crimson Tide surged after saying that it has called a general meeting as it looks to get shareholder approval for a capital reconstruction.

Market Movers

FTSE 100 (UKX) 6,291.58 -0.36%
FTSE 250 (MCX) 17,523.77 -0.26%
techMARK (TASX) 3,264.52 -0.16%

FTSE 100 - Risers

Antofagasta (ANTO) 472.00p 2.45%
Anglo American (AAL) 312.90p 1.81%
Fresnillo (FRES) 722.50p 1.76%
International Consolidated Airlines Group SA (CDI) (IAG) 616.50p 1.15%
Centrica (CNA) 222.90p 0.91%
Carnival (CCL) 3,909.00p 0.90%
Worldpay Group (WI) (WPG) 306.30p 0.76%
Shire Plc (SHP) 4,717.00p 0.73%
Randgold Resources Ltd. (RRS) 4,253.00p 0.47%
Reckitt Benckiser Group (RB.) 6,334.00p 0.46%

FTSE 100 - Fallers

Hikma Pharmaceuticals (HIK) 2,319.00p -1.65%
Burberry Group (BRBY) 1,206.00p -1.55%
Royal Bank of Scotland Group (RBS) 305.30p -1.55%
Sports Direct International (SPD) 565.00p -1.48%
Standard Chartered (STAN) 572.40p -1.45%
Glencore (GLEN) 91.87p -1.32%
Legal & General Group (LGEN) 268.60p -1.25%
HSBC Holdings (HSBA) 537.90p -1.23%
BP (BP.) 356.65p -1.14%
Sainsbury (J) (SBRY) 262.10p -1.06%

FTSE 250 - Risers

Sophos Group (SOPH) 263.50p 3.01%
Nostrum Oil & Gas (NOG) 421.20p 2.06%
Just Eat (JE.) 495.00p 2.02%
Moneysupermarket.com Group (MONY) 366.30p 1.19%
Balfour Beatty (BBY) 271.70p 1.08%
Laird (LRD) 355.40p 0.97%
P2P Global Investments C (P2P2) 983.50p 0.92%
Stagecoach Group (SGC) 300.70p 0.87%
Jardine Lloyd Thompson Group (JLT) 930.00p 0.87%
Auto Trader Group (AUTO) 439.20p 0.80%

FTSE 250 - Fallers

Ocado Group (OCDO) 310.00p -4.88%
Vesuvius (VSVS) 331.00p -4.25%
Jimmy Choo (CHOO) 135.70p -3.07%
Vectura Group (VEC) 172.50p -2.82%
Brown (N.) Group (BWNG) 308.00p -2.53%
Acacia Mining (ACA) 182.10p -2.52%
Serco Group (SRP) 94.70p -2.37%
Morgan Advanced Materials (MGAM) 258.90p -2.01%
Zoopla Property Group (WI) (ZPLA) 232.60p -1.90%
Home Retail Group (HOME) 99.65p -1.82%