London stocks were back in the red at the end of a turbulent Monday session, as rising bond yields across the pond turned up the pressure, after Hong Kong shares in Chinese property developer Evergrande were suspended.
The FTSE 100 ended the session down 0.23% at 7,011.01, and the FTSE 250 was off 1.4% at 22,654.92.
Sterling was stronger, meanwhile, last trading 0.49% higher on the dollar at $1.3613, and gaining 0.27% against the euro to €1.1724.
“Friday’s optimism in US markets has disappeared in a flash, and with it have gone hopes of a continued recovery in equity markets,” said IG chief market analyst Chris Beauchamp.
“This marks a resumption of the ‘sell the rallies’ approach that dominated in September, and it seems that this is still the way to go, as a cocktail of inflation, rate hike and China worries combine to send buyers running from the market once again.
“If this is a pre-earnings season drop then it looks like we have further to go before stocks start to look good value heading into the October reporting period.”
On the fuel crisis, British military truck drivers began delivering to petrol stations on Monday, as industry officials said the situation appeared to be easing in the North and the Midlands, although there were still long queues in London and the South East.
A shortage of qualified truck drivers since Brexit was implemented had led to panic buying over the past week, despite no actual decline in fuel levels at refineries.
After pressure from industry and motorists to act, the government last week agreed to deploy 200 soldiers to help with deliveries.
“Stocks in London and the South of England have been recovering at slightly slower rates than other parts of the UK, so we have begun deploying military personnel to boost supply in these areas,” a government spokesperson said.
“More than half of those who have completed training to make fuel deliveries are being deployed to terminals serving London and the South-East of England, demonstrating that the sector is allocating drivers to areas most affected in this first phase from Monday.”
In Asia, embattled Chinese property developer Evergrande confirmed its shares were suspended from trading in Hong Kong ahead of a “major transaction”.
In a brief statement, the firm said trading in its stock had been halted “pending the release by the company of an announcement containing inside information about a major transaction”.
Trading in the firm’s property management unit Evergrande Property Services, which was listed in Hong Kong just under a year ago, was also suspended.
On the global economic front, the Word Trade Organization (WTO) hiked its forecasts for the global trade in goods, but warned that downside risks from the pandemic and vaccine inequity in particular remained.
The global trade body said it expected world merchandise trade volume to grow 10.8% this year, up from its forecast for growth of 8.0%, made in March.
That growth was anticipated to moderate in the following year, improving by 4.7%, up from 4.0% predicted previously.
“Growth should moderate as merchandise trade approaches its pre-pandemic long-run trend,” the WTO said.
“Supply-side issues such as semiconductor scarcity and port backlogs may strain supply chains and weigh on trade in particular areas, but they are unlikely to have large impacts on global aggregates.”
In equity markets, BT closed down 4.66%, with traders pointing to a Telegraph article suggesting that Sky is closing in on a deal with Virgin Media O2 to become an investor in the telecoms operator’s full-fibre broadband rollout.
Morrisons was also in the red, losing 3.74% after US private equity group Clayton, Dubilier & Rice won an auction for the supermarket chain with a £7bn bid.
The win was revealed by the Takeover Panel on Saturday. CD&R offered 287p a share, against a rival bid from Fortress, for 286p per share.
Rival Sainsbury’s gained 3.37%, and Tesco advanced 1.49% .
Russ Mould, investment director at AJ Bell, said investors were speculating that Sainsbury’s would be the next takeover target in the supermarket sector.
“Fortress, which was unlucky in the Morrisons bid, is seen to be eager to make a large transaction, so one must wonder if Sainsbury’s is the next logical business to tick all the right boxes for the US dealmaker,” he said.
Elsewhere, Mike Ashley’s Frasers Group was knocked 6.92% lower by a double-downgrade to ‘underperform’ at Bank of America Merrill Lynch.
Catering group Compass fell 2.73% after it said chief financial officer Karen Witts would step down from the role at the end of October.
The company said Palmer Brown, currently its group commercial director, had been appointed to replace Witts on 1 November.
Media group Future also fell, by 4.47%, even after saying that full-year operating profit was set to be at the top end of expectations thanks to continued momentum in digital advertising, as it announced the departure of its chief financial officer.
Full-year adjusted operating profit will be at the top end of the consensus range of between £183.5m and £193.6m, it said, following July’s upgraded forecast for the year.
That compared to 2020 adjusted operating profit of £93.4m.
On the upside, online trading platform Plus500 added 1.96% after it said it now expected 2021 revenue and core earnings to be ahead of analyst forecasts after delivering “further positive momentum” in the third quarter.
Market Movers
FTSE 100 (UKX) 7,011.01 -0.23%
FTSE 250 (MCX) 22,654.92 -1.40%
techMARK (TASX) 4,537.70 -0.99%
FTSE 100 – Risers
Sainsbury (J) (SBRY) 294.10p 3.37%
Imperial Brands (IMB) 1,557.00p 1.96%
BP (BP.) 344.45p 1.92%
Informa (INF) 570.60p 1.75%
Royal Dutch Shell ‘B’ (RDSB) 1,670.80p 1.53%
Royal Dutch Shell ‘A’ (RDSA) 1,672.60p 1.51%
Tesco (TSCO) 251.65p 1.49%
Vodafone Group (VOD) 113.78p 1.41%
Glencore (GLEN) 355.00p 1.23%
British American Tobacco (BATS) 2,567.00p 1.08%
FTSE 100 – Fallers
BT Group (BT.A) 151.45p -4.66%
Morrison (Wm) Supermarkets (MRW) 285.90p -3.74%
Compass Group (CPG) 1,514.50p -2.73%
Scottish Mortgage Inv Trust (SMT) 1,352.00p -2.35%
Intermediate Capital Group (ICP) 1,999.50p -2.32%
Royal Mail (RMG) 409.10p -2.30%
3i Group (III) 1,252.00p -2.26%
Flutter Entertainment (CDI) (FLTR) 14,500.00p -2.16%
Rightmove (RMV) 669.00p -1.99%
Ashtead Group (AHT) 5,504.00p -1.92%
FTSE 250 – Risers
Harbour Energy (HBR) 374.20p 5.41%
BH Macro Ltd. GBP Shares (BHMG) 3,560.00p 3.71%
Syncona Limited NPV (SYNC) 175.20p 3.06%
CMC Markets (CMCX) 277.50p 2.59%
Plus500 Ltd (DI) (PLUS) 1,407.00p 1.96%
Wood Group (John) (WG.) 229.80p 1.69%
Contour Global (GLO) 191.00p 1.49%
Energean (ENOG) 899.50p 1.41%
Euromoney Institutional Investor (ERM) 1,108.00p 1.28%
Marks & Spencer Group (MKS) 183.85p 1.24%
FTSE 250 – Fallers
Frasers Group (FRAS) 620.00p -6.91%
Trainline (TRN) 338.20p -5.53%
Restaurant Group (RTN) 100.00p -5.30%
Mitchells & Butlers (MAB) 238.20p -5.18%
SSP Group (SSPG) 282.40p -5.01%
Liontrust Asset Management (LIO) 2,000.00p -4.99%
Clarkson (CKN) 3,700.00p -4.88%
Wetherspoon (J.D.) (JDW) 1,019.00p -4.68%
National Express Group (NEX) 233.20p -4.66%
Tyman (TYMN) 401.50p -4.63%
