London open: Stocks reverse gains as Brexit worries resume

London’s top tier index opened higher but soon reversed gains amid political instability and concerns over the UK economy after Britain voted to leave the European Union last Friday.

With a question mark hanging over the next prime minister and division within the Labour Party, Brexit has already caused a headache before the government has even invoked Article 50, which formally begins the process of Britain’s divorce from the EU.

US President Barack Obama on Wednesday warned that Brexit raises "longer-term concerns about global growth" as it would freeze the possibilities of investment in Great Britain or Europe as a whole.

Bank of England governor Mark Carney is due to speak at 1600 BST with the focus on any remarks on his plans to cushion to blow of Brexit.

Away from Brexit, the final estimate of first quarter UK gross domestic product from the Office for National Statistics is due at 0930 BST. Analysts expect quarter-on-quarter growth of 0.4% and year-on-year growth of 2.0%. Fourth quarter GDP rose 0.6% on the quarter and 2.1% on the year.

UK consumer confidence remained in negative territory in June, GfK said, with the index unchanged at -1. Analysts expected a reading of -2. Confidence was hit by concerns that economic growth could be affected following a Brexit vote.

In the eurozone, the consumer price index from Eurostat at 1000 BST is expected to have improved to an annualised 0% in June from a fall of 0.1% the previous month.

Elsewhere, initial jobless claims are due at 1330 BST.

Meanwhile, oil prices reversed the previous day’s rally with Brent crude down 1.13% to $50.04 per barrel and West Texas Intermediate down 1.01% to $49.38 per barrel at 0902 BST.

Engineering company Weir Group gained after it announced that following discussions with chief operating officer Dean Jenkins, it has been agreed that he will step down from the board on 30 September.

Rio Tinto edged higher as it said it was ending its involvement with Papua New Guinea by giving up ownership of the Panguna copper mine on Bougainville island.

Banks and housebuilders were back in the red on renewed Brexit worries. Barclays and Royal Bank of Scotland were the biggest fallers among banks while Taylor Wimpey, Berkeley Group and Barratt Developments led the declines in housebuilders.

Market Movers

FTSE 100 (UKX) 6,323.33 -0.58%
FTSE 250 (MCX) 15,949.34 -0.33%
techMARK (TASX) 3,135.07 -0.36%

FTSE 100 - Risers

3i Group (III) 535.00p 6.05%
International Consolidated Airlines Group SA (CDI) (IAG) 364.90p 1.56%
Bunzl (BNZL) 2,259.00p 1.30%
Mondi (MNDI) 1,355.00p 1.04%
BAE Systems (BA.) 509.00p 0.69%
Informa (INF) 696.50p 0.65%
ARM Holdings (ARM) 1,095.00p 0.64%
Schroders (SDR) 2,262.00p 0.35%
Unilever (ULVR) 3,461.00p 0.33%
Experian (EXPN) 1,363.00p 0.29%

FTSE 100 - Fallers

Royal Bank of Scotland Group (RBS) 170.90p -5.16%
Royal Mail (RMG) 484.20p -4.50%
Travis Perkins (TPK) 1,448.00p -3.27%
Taylor Wimpey (TW.) 129.40p -2.63%
ITV (ITV) 173.60p -2.31%
Barclays (BARC) 135.10p -2.07%
Whitbread (WTB) 3,494.00p -2.05%
Berkeley Group Holdings (The) (BKG) 2,500.00p -1.96%
Barratt Developments (BDEV) 400.80p -1.93%
Sainsbury (J) (SBRY) 226.00p -1.65%

FTSE 250 - Risers

CLS Holdings (CLI) 1,405.00p 6.04%
Softcat (SCT) 314.00p 4.67%
Go-Ahead Group (GOG) 1,983.00p 4.42%
Acacia Mining (ACA) 449.90p 3.38%
Sophos Group (SOPH) 203.50p 3.19%
OneSavings Bank (OSB) 203.00p 2.89%
Genus (GNS) 1,544.00p 2.66%
Redefine International (RDI) 44.64p 2.39%
Mitie Group (MTO) 249.30p 2.30%
Weir Group (WEIR) 1,430.00p 2.14%

FTSE 250 - Fallers

Zoopla Property Group (WI) (ZPLA) 250.10p -6.61%
CYBG (CYBG) 220.70p -6.20%
PayPoint (PAY) 914.50p -5.62%
Paragon Group Of Companies (PAG) 237.90p -4.84%
Brown (N.) Group (BWNG) 174.30p -3.91%
Jupiter Fund Management (JUP) 347.90p -3.82%
Tate & Lyle (TATE) 646.00p -3.65%
ICAP (IAP) 399.20p -3.60%
Ocado Group (OCDO) 216.10p -2.66%
Henderson Group (HGG) 207.00p -2.54%