London midday: Stocks fall as miners slump after Glencore results

Glencore reported a first half net loss of $369m, compared to a $676m net loss in the same period last year, supported by cost cuts.

However, the miner’s shares plunged as analysts focused on news of a $395m loss on a coal hedging operation.

Analysts were also disappointed that the company hadn’t raised its target for full year earnings guidance of $2.4-$2.7bn for its commodity trading business.

News that Glencore will delay resuming production at its Katanga Mining unit to early 2018 due to stubbornly low copper prices was another drag on the group’s shares.

“While the company is prioritising reducing the debt levels, we believe that for the time being, the shares will continue to be extremely volatile,” said Helal Miah, investment research analyst at the Share Centre.

Shares in a batch of other FTSE 100 miners, including Fresnillo, Randgold Resources, Antofagasta and Anglo American, also slid.

Going the other way, WPP topped London’s first tier index after the advertising giant reported better-than-expected headline pre-tax profit, revenue and organic sales growth for the first half.

Housebuilders continued to rally following Persimmon’s first half results on Tuesday, which revealed a jump in profits that was higher than forecast. The company's upbeat results were seen to signal that Brexit has had little impact on the market. Barratt Developments, Berkeley Group and Taylor Wimpey were among the biggest risers on the FTSE 100.

FTSE 250-listed One Savings Bank also surged after reporting first half profits that beat market estimates.

In economic data, mortgage lending fell in London in the second quarter of the year amid a growing market in the rest of the UK regions, according to the Council of Mortgage Lenders.

London mortgage borrowing of £5.5bn in the second quarter was a 23% fall on the first quarter and 3% fall on a year ago, as a rise in first-time buying was not enough to offset a big decline from those moving house.

Numbers of mortgages fell 17% to 17,500 quarter-on-quarter and 8% compared to the second quarter 2015.

Elsewhere, Germany’s economy slowed in the second quarter on lower investments, official data showed. Germany's gross domestic product rose at a quarterly rate of 0.4%, according to the Federal Statistical Office, Destatis, in line with the flash estimate but down on the first quarter’s 0.7% growth.

Destatis said an increase in foreign trade and consumption was offset by weak investment. Construction investment fell 1.6% quarter-on-quarter and while investment in machinery and equipment declined 2.4%.

German exports increased 1.2%, but imports dropped 0.1%, signalling slack domestic investment. Economists had expected a 0.7% increase in exports and a 0.3% fall in imports.

Still to come, the US house price index at 1400 BST, US existing home sales at 1500 BST and US weekly crude inventories from the Energy Information Administration at 1530 BST.

The data from the EIA follows a report from the American Petroleum Institute which showed an increase of 4.5 million barrels in US crude stockpiles last week.

Oil prices fell in response to the API data, with Brent down 0.97% to $49.48 per barrel and West Texas Intermediate down 1.6% to $47.33 per barrel at 1150 BST.

Meanwhile, investors are exercising caution ahead of the Federal Reserve’s annual conference in Jackson Hole on Friday with chair Janet Yellen’s speech to be closely eyed for any remarks on interest rates.

“While the message coming from Fed officials has been quite mixed and left the markets with little idea of what the Fed is planning –it initially intended to raise rates four times this year and so far it hasn’t done so once – the message from Stanley Fischer and William Dudley, both permanent voters on the FOMC, last week were quite hawkish,” said Craig Erlam, senior market analyst at Oanda.

“Should Yellen deliver an equally hawkish warning on Friday then I expect markets to respond accordingly, with December likely becoming the most likely meeting but September being more priced in that it currently is.”

Market Movers

FTSE 100 (UKX) 6,852.69 -0.23%
FTSE 250 (MCX) 18,014.74 0.18%
techMARK (TASX) 3,501.85 -0.24%

FTSE 100 - Risers

WPP (WPP) 1,849.00p 5.84%
Barratt Developments (BDEV) 500.50p 2.94%
Berkeley Group Holdings (The) (BKG) 2,724.00p 2.83%
Lloyds Banking Group (LLOY) 59.09p 2.60%
Persimmon (PSN) 1,917.00p 2.51%
Travis Perkins (TPK) 1,666.00p 2.27%
Taylor Wimpey (TW.) 168.40p 2.00%
International Consolidated Airlines Group SA (CDI) (IAG) 400.10p 1.73%
Kingfisher (KGF) 371.00p 1.39%
Barclays (BARC) 166.85p 1.37%

FTSE 100 - Fallers

Glencore (GLEN) 180.05p -5.14%
Old Mutual (OML) 196.80p -3.77%
Fresnillo (FRES) 1,795.00p -2.23%
Mediclinic International (MDC) 1,045.00p -2.15%
Randgold Resources Ltd. (RRS) 7,850.00p -2.12%
Paddy Power Betfair (PPB) 9,785.00p -1.66%
Anglo American (AAL) 861.80p -1.63%
Mondi (MNDI) 1,574.00p -1.56%
Rolls-Royce Holdings (RR.) 782.00p -1.51%
Antofagasta (ANTO) 545.50p -1.45%

FTSE 250 - Risers

OneSavings Bank (OSB) 262.60p 10.66%
Shawbrook Group (SHAW) 203.50p 7.39%
Countrywide (CWD) 272.10p 5.71%
Aldermore Group (ALD) 146.50p 4.42%
Marshalls (MSLH) 299.50p 4.39%
Brown (N.) Group (BWNG) 209.70p 4.22%
Ocado Group (OCDO) 301.00p 3.40%
McCarthy & Stone (MCS) 197.40p 3.30%
Grafton Group Units (GFTU) 586.50p 3.26%
Redrow (RDW) 382.00p 3.02%

FTSE 250 - Fallers

Investec (INVP) 469.80p -4.59%
Acacia Mining (ACA) 557.50p -2.79%
Centamin (DI) (CEY) 165.30p -2.30%
Vedanta Resources (VED) 527.00p -1.95%
Redefine International (RDI) 43.38p -1.70%
Just Eat (JE.) 575.00p -1.46%
Pennon Group (PNN) 880.00p -1.29%
Spire Healthcare Group (SPI) 343.60p -1.26%
William Hill (WMH) 328.70p -1.20%
Capital & Counties Properties (CAPC) 290.70p -1.19%