London open: Deutsche Bank knocks Footsie off its perch

London stocks started the session sharply lower amid growing concerns about Deutsche Bank and the broader financial sector.

As of 0942 BST the FTSE 100 was trading lower by 95.71 points to 6,8523.71.

Financial shares were lower across all of Europe following reports on Thursday evening that a number of key funds had withdrawn money from Deutsche Bank, which currently faces a $14bn fine from the US Department of Justice for mis-selling mortgage-backed securities.

Ten hedge funds had reportedly reduced their exposure to the lender.

The funds, a small sub-set of the over 800 who do business with Deutsche Bank, had moved their listed derivative holdings to rivals, according to an internal document seen by Bloomberg.

Nonetheless, the "vast majority" of Deutsche´s more than 200 derivatives clearing clients had made no changes, the report said.

As of 0928 BST shares in Deutsche Bank were down by 7.59% to €10.05, having hit an intraday low of €9.99.

CMC Markets’ Michael Hewson said: "While these firms represent a fairly small part of the banks clients, as a weather vane in the current febrile environment, it doesn’t exactly represent a vote of confidence either, and sent the US listed shares of the bank to a record low."

On the data front, the final release of second-quarter UK GDP and Britain´s current account are due at 0930 BST. In the US, personal income and spending is at 1330 BST, Chicago PMI at 1445 BST and University of Michigan consumer sentiment at 1500 BST.

September euro area CPI figures are expected at 1000 BST.

Overnight, GfK´s gauge of consumer sentiment rose from -7 points in August to -1 in September, versus economists´ forecasts for a reading of -5.

"Irrespective of the improvement in sentiment since the referendum, our view is that households will only materially change habits once they are directly impacted, at which point we are likely to see a material fall in confidence levels, in our view," economists at Barclays Research said.

In corporate news, Royal Bank of Scotland Group announced its proposals to regroup its businesses and separate its essential banking services from investment banking, in order to comply with UK ring-fencing legislation.

The company said it will transfer most of its existing private, business and commercial customers from RBS plc to its current Scottish private bank Adam & Company in mid-2018, renaming it The Royal Bank of Scotland plc.

At the same time, RBS plc will be renamed NatWest Markets plc and continue to operate its CIB businesses.

FTSE 250 listed residential landlord Grainger is to buy a private sector build-to-rent development on the Former Yorkshire Post gateway site from YP Real Estate for £40m.

The development is expected to be completed in 2019 and once the properties are fully let it is anticipated to have an annual return on investment of about 7%.

IG Group has agreed to buy global news and research portal DailyFX and its associated assets from FXCM Inc. for a total consideration of $40m.

IG said the deal, which is expected to complete by the end of October, is part of its aim of becoming the default choice for active traders globally. The company said this transaction will “significantly enhance” its ability to acquire new clients and to engage with and improve the retention rates of its current clients.

Market Movers

FTSE 100 (UKX) 6,824.64 -1.37%
FTSE 250 (MCX) 17,626.42 -1.33%
techMARK (TASX) 3,462.05 -1.00%

FTSE 100 - Risers

Fresnillo (FRES) 1,833.00p 1.27%
Randgold Resources Ltd. (RRS) 7,960.00p 0.95%
Polymetal International (POLY) 978.50p 0.26%
Burberry Group (BRBY) 1,355.00p 0.15%
SABMiller (SAB) 4,494.50p -0.01%
Travis Perkins (TPK) 1,512.00p -0.26%
InterContinental Hotels Group (IHG) 3,117.00p -0.29%
Reckitt Benckiser Group (RB.) 7,176.00p -0.40%
Smith & Nephew (SN.) 1,233.00p -0.40%
Royal Mail (RMG) 480.60p -0.46%

FTSE 100 - Fallers

Barclays (BARC) 160.65p -3.97%
Royal Bank of Scotland Group (RBS) 170.70p -3.61%
Aviva (AV.) 428.50p -3.43%
Prudential (PRU) 1,345.50p -3.24%
Legal & General Group (LGEN) 211.80p -3.20%
Standard Life (SL.) 335.40p -2.81%
Old Mutual (OML) 197.10p -2.81%
Capita (CPI) 678.50p -2.79%
London Stock Exchange Group (LSE) 2,757.00p -2.68%
Schroders (SDR) 2,633.00p -2.48%

FTSE 250 - Risers

Centamin (DI) (CEY) 150.60p 0.80%
Domino's Pizza Group (DOM) 364.40p 0.36%
Euromoney Institutional Investor (ERM) 1,103.00p 0.27%
Millennium & Copthorne Hotels (MLC) 444.10p 0.25%
Fidelity China Special Situations (FCSS) 175.00p 0.23%
Hochschild Mining (HOC) 296.00p 0.20%
DFS Furniture (DFS) 254.50p 0.20%
UDG Healthcare Public Limited Company (UDG) 633.50p 0.16%
GCP Infrastructure Investments Ltd (GCP) 131.00p 0.15%
Entertainment One Limited (ETO) 213.30p 0.09%

FTSE 250 - Fallers

AO World (AO.) 161.60p -3.98%
Shawbrook Group (SHAW) 230.40p -3.92%
Paragon Group Of Companies (PAG) 302.40p -3.69%
Aldermore Group (ALD) 163.30p -3.66%
Investec (INVP) 461.00p -3.44%
Hastings Group Holdings (HSTG) 229.20p -3.33%
IP Group (IPO) 168.30p -3.22%
Crest Nicholson Holdings (CRST) 423.30p -3.11%
Electra Private Equity (ELTA) 4,313.00p -3.08%
Henderson Group (HGG) 225.60p -3.05%