London open: Stocks fall after weak Asian session, Fed minutes

London stocks fell in early trade on Thursday following a weak session in Asia, as minutes from the latest Federal Reserve meeting showed the central bank discussed slowing stimulus.

At 0910 BST, the FTSE 100 was down 1% at 7,080.33.

Russ Mould, investment director at AJ Bell, said: "In Asia, Hong Kong’s Hang Seng slumped by nearly 3% as Chinese tech stocks experienced a major sell-off amid fears of further regulatory interference.

"This year we’ve already had a big fine for Alibaba for violating anti-monopoly rules and more recently Chinese authorities told app stores to remove ride-hailing group Didi from their platforms, saying it illegally collected users’ personal data.

"China is clearly flexing its muscles and investors in this space should have already braced themselves for regulatory interference after the move on Alibaba."

Mould said the fact that miners and banks are under the cosh in London suggests investors have started to worry again about the strength of the economic recovery.

"Miners’ fortunes are heavily tied to commodity prices and the cost of metals and minerals is typically determined by supply and demand for industrial projects around the world," he said. "Banks are also heavily influenced by economic activity. A strong period of growth means there could be greater opportunities to lend money to businesses and such a backdrop might also point to rising interest rates which increases the chance for the banking sector to make higher profit margins. If the economic outlook is not as strong, then investors start to go off banks for fear that it will be harder for them to push up earnings."

Antofagasta, Anglo American and Rio were all trading lower, along with Barclays and NatWest.

Elsewhere, B&M European Value Retail fell even as the discount retailer said it made a strong start to the year as it reported first-quarter UK like-for-like sales up by more than a fifth compared with pre-pandemic levels.

Housebuilder Persimmon lost ground despite saying it was accelerating a capital return to shareholders as strong first-half trading generated revenue of £1.84bn.

WH Smith was trading a little lower even as it said that sales are gradually recovering as Covid restrictions ease and upgraded its full-year expectations thanks to an improved performance in North America.

Coca-Cola HBC dropped as it traded without entitlement to the dividend, while TI Fluid Systems was hit by a downgrade to ‘add’ from ‘buy’ at Numis.

On the upside, Ladbrokes owner Entain gained after it increased its guidance for full-year earnings following a strong performance from the gambling group in the first half.

Food delivery group Deliveroo was a high riser as it lifted its full-year guidance after a strong second quarter, which saw orders grow 88%.

Market Movers

FTSE 100 (UKX) 7,080.33 -0.99%
FTSE 250 (MCX) 22,839.22 -0.57%
techMARK (TASX) 4,460.18 -0.56%

FTSE 100 - Risers

Entain (ENT) 1,838.00p 1.69%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,880.00p 1.34%
Tesco (TSCO) 239.00p 0.65%
Ocado Group (OCDO) 1,937.00p 0.62%
Flutter Entertainment (CDI) (FLTR) 13,430.00p 0.41%
Informa (INF) 514.40p 0.39%
Experian (EXPN) 2,951.00p 0.27%
Croda International (CRDA) 7,604.00p 0.11%
BAE Systems (BA.) 528.80p -0.04%
Rentokil Initial (RTO) 518.00p -0.08%

FTSE 100 - Fallers

B&M European Value Retail S.A. (DI) (BME) 561.60p -2.77%
Coca-Cola HBC AG (CDI) (CCH) 2,575.00p -2.61%
British American Tobacco (BATS) 2,749.00p -2.59%
Antofagasta (ANTO) 1,403.00p -2.57%
Anglo American (AAL) 2,919.50p -2.39%
Barclays (BARC) 168.70p -2.20%
Rio Tinto (RIO) 5,905.00p -2.20%
NATWEST GROUP PLC ORD 100P (NWG) 198.20p -2.12%
Evraz (EVR) 588.00p -2.03%
Fresnillo (FRES) 807.40p -1.99%

FTSE 250 - Risers

Tyman (TYMN) 460.00p 2.45%
CLS Holdings (CLI) 256.00p 1.99%
Herald Investment Trust (HRI) 2,425.00p 1.46%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,880.00p 1.34%
Oxford Biomedica (OXB) 1,382.00p 0.88%
NCC Group (NCC) 311.50p 0.81%
Diversified Energy Company (DEC) 105.60p 0.76%
Energean (ENOG) 731.00p 0.76%
LXI Reit (LXI) 143.00p 0.70%
Countryside Properties (CSP) 506.50p 0.70%

FTSE 250 - Fallers

TI Fluid Systems (TIFS) 296.00p -5.88%
Ferrexpo (FXPO) 420.60p -3.27%
QinetiQ Group (QQ.) 337.00p -2.83%
Telecom Plus (TEP) 1,158.00p -2.69%
Wood Group (John) (WG.) 212.60p -2.30%
Micro Focus International (MCRO) 418.20p -2.11%
Oxford Instruments (OXIG) 2,420.00p -2.02%
Spire Healthcare Group (SPI) 222.00p -1.99%
Carnival (CCL) 1,545.60p -1.89%
Trainline (TRN) 305.40p -1.80%