London open: Stocks flat as Evergrande shares suspended
London stocks were steady in early trade on Thursday as the suspension of Evergrande shares weighed on sentiment.
At 0830 BST, the FTSE 100 was flat at 7,595.25.
Earlier in the day, shares in embattled Chinese property firm Evergrande were suspended from the Hong Kong Stock Exchange. No explanation was given, but on Wednesday, Bloomberg reported that the company’s chair was under police surveillance.
Susannah Streeter, heads of money and markets at Hargreaves Lansdown, said: "Confidence in the company has hit rock bottom as it has tried to grapple for survival, weighed down by its mountain of debt It has been trying to reach a deal with creditors, but attempts to restructure its debts have hit the buffers due to official investigations into other workings of the vast company.
"Attempts by authorities to breathe new life into the crisis-hit property sector haven’t failed to revive its fortunes. With the chairman now reported to be under police surveillance, and with no viable solutions in sight for its multitude of problems, liquidation looks increasingly likely. Given the size of the company, if all its operations are halted and a fire sale of its assets takes place, stopping contagion spreading into other sectors would prove highly difficult."
In equity markets, BP and Shell were among the risers as oil prices jumped after the latest Energy Information Administration report showed that US commercial crude oil inventories declined by 2.2m barrels on the week.
Streeter said: "Brent Crude has swept past $97 a barrel as the effect of Saudi Arabia and Russia’s extended production cuts takes hold and data shows a faster than expected drawdown of crude stocks in the United States. Despite slowing economies in Europe and fragility in China, global demand for oil for now continues to ramp up, to meet the seemingly insatiable needs for transportation, power generation and other petrochemical activities."
Diageo edged higher after saying it remains well positioned to deliver on its guidance, despite ongoing cost pressures and macroeconomic uncertainty.
Pub and restaurant chain Mitchells & Butlers also gained after saying it expects full-year earnings to be at the top end of expectations after a strong rise in sales and easing of cost headwinds. The company said strong trading had continued through the fourth quarter, bringing year to date like-for-like sales growth to 9.1%, with total sales growth now of 10.5%.
Elsewhere, Babcock surged as the defence contractor backed its full-year expectations, saying that trading since the start of the financial year has been "encouraging".
On the downside, Phoenix Group, British American Tobacco, Barratt Developments, M&G and Rightmove all lost ground as they traded without entitlement to the dividend.
888 tanked after the gambling group said it expects revenue for the third quarter to fall by around 10% to £400m.
Digital9 Infrastructure tumbled as it scrapped its second-quarter dividend after a tough first half and said it swung to a loss of 6.63p per share in the six months to 30 June, compared with earnings of 3.43p a year earlier.
Market Movers
FTSE 100 (UKX) 7,595.25 0.03%
FTSE 250 (MCX) 18,205.46 -0.08%
techMARK (TASX) 4,316.87 -0.22%
FTSE 100 - Risers
CRH (CDI) (CRH) 4,619.00p 2.78%
Severn Trent (SVT) 2,351.00p 1.77%
BP (BP.) 547.90p 1.75%
Beazley (BEZ) 554.50p 1.37%
Shell (SHEL) 2,658.50p 1.10%
Diageo (DGE) 3,047.00p 0.83%
Diploma (DPLM) 2,978.00p 0.81%
BAE Systems (BA.) 1,022.00p 0.79%
DCC (CDI) (DCC) 4,588.00p 0.77%
Burberry Group (BRBY) 1,898.50p 0.72%
FTSE 100 - Fallers
Barratt Developments (BDEV) 442.70p -5.49%
Phoenix Group Holdings (PHNX) 482.80p -4.92%
Entain (ENT) 911.60p -3.02%
M&G (MNG) 197.30p -2.81%
Flutter Entertainment (CDI) (FLTR) 13,270.00p -2.75%
British American Tobacco (BATS) 2,559.00p -2.50%
Rightmove (RMV) 554.40p -1.46%
International Consolidated Airlines Group SA (CDI) (IAG) 146.65p -1.35%
Croda International (CRDA) 4,631.00p -1.28%
Centrica (CNA) 155.80p -1.24%
FTSE 250 - Risers
Babcock International Group (BAB) 427.40p 10.04%
Ithaca Energy (ITH) 183.20p 3.15%
Mitchells & Butlers (MAB) 220.00p 2.52%
Moonpig Group (MOON) 167.60p 2.20%
Harbour Energy (HBR) 267.90p 1.63%
Wetherspoon (J.D.) (JDW) 687.50p 1.48%
Allianz Technology Trust (ATT) 262.00p 1.16%
Diversified Energy Company (DEC) 83.00p 1.16%
Energean (ENOG) 1,159.00p 0.96%
Hammerson (HMSO) 24.08p 0.92%
FTSE 250 - Fallers
Digital 9 Infrastructure NPV (DGI9) 48.00p -13.36%
888 Holdings (DI) (888) 97.65p -11.63%
Tyman (TYMN) 278.00p -3.14%
Assura (AGR) 41.96p -2.46%
Ferrexpo (FXPO) 76.40p -2.24%
Helios Towers (HTWS) 74.20p -2.11%
PureTech Health (PRTC) 191.20p -1.95%
LXI Reit (LXI) 88.35p -1.83%
Spirent Communications (SPT) 135.40p -1.74%
Kainos Group (KNOS) 1,144.00p -1.46%