London midday: Travel and leisure stocks lead equities lower
London equities dropped at midday trading on Tuesday as the Bank of England warned on the risks from slowing growth in emerging markets.
BoE chief economist Andy Haldane said monetary policy may need to be eased rather than tightened in the short-term in response to headwinds from emerging markets.
In testimony to the Treasury Select Committee on Tuesday morning, he said “risks to the UK from the external environment are skewed to the downside, as they are in the Bank’s latest Inflation Report projections”.
Governor Mark Carney also explained that interest rates remained low due to external risks, demographic changes and the impact of technology on the labour market.
He added that the Bank is committed to maintaining quantitative easing until interest rates reach 2%.
In economic data, a survey from the Confederation of British Industry showed retail sales in the year to November slowed again, while orders fell for the first time since April. The CBI's distributive trades survey revealed the trade balance fell to +7% from +19% in September and significantly below expectations for +24%.
“While the CBI reported weaker than expected retail sales growth in the first half of November, there is highly likely to be a significant element of consumers gearing up for this week’s Black Friday weekend,” said Howard Archer, chief UK and European economist at IHS Global Insight. “In recent years, consumers have become a lot more inclined to time their spending in the run-up to Christmas as to when the best offers are likely to be around.”
Still to come, US economic growth data at 1330 GMT will be in focus amid speculation of an interest rate hike in December. Gross domestic product is expected to be revised to an annualised 2.1% in the third quarter, up from a previous estimate 1.5%.
The US S&P/Case-Shiller Composite-20 will be closely followed at 1400 GMT and economists have pencilled in a 5.15% year-on-year rise in September following a 5.09% a month earlier.
A report on US consumer confidence is due at 1500 GMT, with analysts predicting an improvement in sentiment in November. The confidence index is forecast to rise to 99.5 from 97.6 in October.
Among corporate stocks, easyJet descended after saying that it will cancel all flights to and from Sharm El Sheikh, Egypt, until 6 January after Islamic State claimed responsibility for bringing down a Russian airliner flying from the region late last month.
Fellow travel stocks International Consolidated Airlines and TUI were also on the back foot after data from ForwardKeys showed that new flight bookings to Paris have fallen by over a quarter in the week following the attacks in the city that killed 130 people.
Babcock gained after posting 12% growth in underlying revenue for the first half of the year, due to strong growth in its support services division.
Intertek jumped after saying it was on track to deliver its full year target as it benefits from strong growth in its products and trade-related businesses.
Market Movers
FTSE 100 (UKX) 6,251.93 -0.85%
FTSE 250 (MCX) 16,931.56 -1.03%
techMARK (TASX) 3,161.41 -0.65%
FTSE 100 - Risers
Babcock International Group (BAB) 1,043.00p 3.78%
Glencore (GLEN) 92.28p 2.06%
Intertek Group (ITRK) 2,629.00p 1.86%
Johnson Matthey (JMAT) 2,777.00p 0.84%
Randgold Resources Ltd. (RRS) 3,975.00p 0.48%
RSA Insurance Group (RSA) 430.00p 0.47%
Rolls-Royce Holdings (RR.) 571.50p 0.44%
Compass Group (CPG) 1,080.00p 0.28%
Coca-Cola HBC AG (CDI) (CCH) 1,619.00p 0.06%
SABMiller (SAB) 4,020.00p -0.00%
FTSE 100 - Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 548.75p -3.39%
Burberry Group (BRBY) 1,217.00p -3.26%
GKN (GKN) 291.70p -2.99%
easyJet (EZJ) 1,597.00p -2.98%
Antofagasta (ANTO) 482.60p -2.74%
Whitbread (WTB) 4,341.00p -2.38%
TUI AG Reg Shs (DI) (TUI) 1,063.00p -2.30%
InterContinental Hotels Group (IHG) 2,425.00p -2.30%
Ashtead Group (AHT) 1,034.00p -2.27%
Barratt Developments (BDEV) 560.50p -2.18%
FTSE 250 - Risers
Circassia Pharmaceuticals (CIR) 280.20p 5.74%
Kaz Minerals (KAZ) 92.00p 3.25%
Nostrum Oil & Gas (NOG) 365.50p 2.96%
NMC Health (NMC) 783.00p 2.55%
Riverstone Energy Limited (RSE) 820.00p 2.50%
Spire Healthcare Group (SPI) 298.00p 2.48%
Drax Group (DRX) 236.90p 1.59%
esure Group (ESUR) 245.90p 1.19%
PayPoint (PAY) 998.50p 0.91%
P2P Global Investments (P2P) 1,002.00p 0.86%
FTSE 250 - Fallers
AO World (AO.) 148.50p -8.90%
BBA Aviation (BBA) 180.80p -6.80%
Entertainment One Limited (ETO) 205.10p -5.66%
Mitie Group (MTO) 287.60p -5.02%
Ocado Group (OCDO) 339.00p -4.69%
Evraz (EVR) 81.40p -4.12%
Thomas Cook Group (TCG) 98.10p -3.92%
Sophos Group (SOPH) 272.00p -3.58%
Premier Oil (PMO) 72.00p -3.55%
Paragon Group Of Companies (PAG) 387.20p -3.20%