London open: Stocks decline as China enters bear market

UK stocks declined on Friday following another loss in Asia as China entered a bear market.

The Shanghai Composite Index fell 3.5% at the close, falling more than 20% from its December high, amid concerns about the volatility. 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.

“The end of the week in Asia has seen emerging markets record their third weekly loss in a row and the same can be said for some European markets as 2016 so far has been a terrible year for global stock markets,” said FXPro chief economist Simon Smith.

Meanwhile, oil prices reversed gains from the previous session as concerns about the oversupply in the market persisted. Brent crude fell 2.2% to $30.19 per barrel and West Texas Intermediate dropped 3.5% to $30.12 per barrel at 0905 GMT.

Turning to Friday’s calendar, UK construction output data is due at 0930 GMT and the Bank of England releases its surveys on credit conditions and bank liabilities at the same time.

The main focus in economic data, however, will be US retail sales figures at 1330 GMT is 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 oil price drop.

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.

BT Group edged higher after the Competition and Markets Authority approved the company’s plans to buy EE.

International Consolidated Airlines climbed as it said it had signed a joint business agreement between British Airways, Iberia and LATAM Airlines Group on flights between Europe and South America.

Market Movers

FTSE 100 (UKX) 5,907.60 -0.18%
FTSE 250 (MCX) 16,410.60 -0.02%
techMARK (TASX) 3,128.51 0.36%

FTSE 100 - Risers

Shire Plc (SHP) 4,234.00p 2.52%
Carnival (CCL) 3,718.00p 1.89%
Next (NXT) 6,785.00p 1.72%
Compass Group (CPG) 1,152.00p 1.59%
Experian (EXPN) 1,148.00p 1.41%
InterContinental Hotels Group (IHG) 2,339.00p 1.30%
Merlin Entertainments (MERL) 411.80p 1.25%
Kingfisher (KGF) 338.20p 1.20%
Persimmon (PSN) 1,963.00p 1.19%
Dixons Carphone (DC.) 459.80p 1.08%

FTSE 100 - Fallers

Anglo American (AAL) 242.05p -7.95%
Antofagasta (ANTO) 356.00p -4.53%
BHP Billiton (BLT) 627.80p -4.44%
Glencore (GLEN) 75.70p -3.71%
Rio Tinto (RIO) 1,678.00p -3.29%
Standard Chartered (STAN) 506.60p -2.35%
Hargreaves Lansdown (HL.) 1,274.00p -2.23%
Old Mutual (OML) 155.80p -1.95%
Royal Dutch Shell 'B' (RDSB) 1,364.50p -1.83%
Royal Dutch Shell 'A' (RDSA) 1,366.00p -1.83%

FTSE 250 - Risers

Mitie Group (MTO) 295.10p 3.11%
AO World (AO.) 156.70p 3.09%
Bovis Homes Group (BVS) 949.50p 2.98%
Tate & Lyle (TATE) 598.50p 2.57%
Croda International (CRDA) 2,933.00p 2.30%
Redrow (RDW) 453.70p 2.14%
Enterprise Inns (ETI) 102.00p 2.10%
Hiscox Limited (DI) (HSX) 998.00p 2.04%
Indivior (INDV) 166.90p 1.89%
Bellway (BWY) 2,753.00p 1.81%

FTSE 250 - Fallers

Moneysupermarket.com Group (MONY) 321.40p -8.49%
Vedanta Resources (VED) 229.40p -4.81%
Hastings Group Holdings (HSTG) 162.20p -4.48%
Tullow Oil (TLW) 132.60p -4.47%
Pendragon (PDG) 44.51p -3.76%
Jupiter Fund Management (JUP) 405.70p -3.52%
Cairn Energy (CNE) 133.20p -3.34%
Ophir Energy (OPHR) 85.65p -3.11%
Evraz (EVR) 61.50p -3.00%
Fidessa Group (FDSA) 1,865.00p -2.81%