London open: Stocks slide following Wall St wobble, airlines hit by Barcelona fears

Fri 18 Aug 2017

LONDON (SHARECAST) - (ShareCast News) - London stocks nosedived in early trade on Friday, with airlines leading the retreat after the terror attacks in Barcelona and following steep losses overnight on Wall Street amid renewed concerns about the Presidency.
After half an hour of trading the FTSE 100 was down 0.75% to 7,332.50. The pound was up 0.17% on the dollar at 1.2890 and flat against the euro at 1.0973.

Fanning the selling, according to traders, were the increased political uncertainty in the US as reports emerged that a third White House panel of business leaders is to be scrapped.

Commenting on the increasingly divisive political backdrop on Capitol Hill, Michael Hewson, chief market analyst at CMC Markets UK said: "With support peeling away from all sides' investors appear to be coming to the conclusion that the US President is likely to find it even more difficult to achieve anything close to what was expected than was the case at the beginning of this year.

"This of course then begs the question as to whether he'll be able to achieve anything at all, at a time when the political cost of continuing to support him rises with each passing day and each tweet storm."

Also stoking the bearishness in US stocks were rumours that Gary Cohn, the chief economic adviser to the White House, might resign.

Meanwhile overnight the Guardian's New York office reported that a third White House panel of business leaders is to be scrapped amid the controversy over Donald Trump's response to neo-Nazi violence in Virginia.
Trump's presidential advisory council on infrastructure will disband along with the two panels that Trump rushed to dissolve on Wednesday when faced with mass resignations of chief executives from some of America's biggest companies.

No significant data releases are scheduled in the UK at the end of the week.

In the States, the University of Michigan's preliminary reading on consumer confidence for the month of August is expected a 1500 BST.

Company news was extremely thin on the ground.

Drugmakers AstraZeneca and Merck have been given approval by the US drug administrator to sell Astra's Lynparza ovarian cancer drug in a new tablet form and to a wider range of cancer sufferers, as the pair begin a new partnership on the front foot. The US Food and Drug Administration granted approval for the drug, which is a PARP inhibitor, meaning it stops the actions of the poly ADP-ribose polymerase protein that helps damaged cells to repair themselves.

Reckitt Benckiser said on it had completed the $4.2bn sale of its food business, including the French's, Frank's RedHot and Cattlemen's brands, to McCormick & Company. RB said it would use the net proceeds to cut debt.

IAG and EasyJet both shed 3% in early trading, while Ryanair was 5% lower on the open before paring losses. Overseas Air France KLM and Lufthansa also slumped following the terror attacks in Spain. "As we've seen over the last couple of years in Europe, these kinds of atrocities affect tourism and will hit airline earnings. Investors are concerned that demand will fall over the rest of the year, which was already looking like it would be a tough patch for the industry," said analyst Neil Wilson at ETX Capital.

The stock leaderboard was topped by precious metals miners Randgold Resources and Fresnillo. The risk-off trading sentiment and the softening US yield environment is conducive for gold, analysts noted, with the Federal Reserve's indecision having removed a major barrier to the positive gold trend.

Market Movers

FTSE 100 (UKX) 7,332.50 -0.75%
FTSE 250 (MCX) 19,664.92 -0.55%
techMARK (TASX) 3,384.10 -0.73%

FTSE 100 - Risers

Randgold Resources Ltd. (RRS) 7,515.00p 1.49%
RSA Insurance Group (RSA) 657.00p 1.15%
Fresnillo (FRES) 1,581.00p 0.96%
Rio Tinto (RIO) 3,451.00p 0.63%
Rentokil Initial (RTO) 293.60p 0.55%
Anglo American (AAL) 1,280.00p 0.08%
Direct Line Insurance Group (DLG) 389.10p 0.08%
Mediclinic International (MDC) 731.50p 0.07%
Glencore (GLEN) 345.15p 0.04%
Royal Dutch Shell 'B' (RDSB) 2,161.50p 0.02%

FTSE 100 - Fallers

easyJet (EZJ) 1,258.00p -3.31%
International Consolidated Airlines Group SA (CDI) (IAG) 603.50p -3.29%
Ashtead Group (AHT) 1,545.00p -2.22%
Coca-Cola HBC AG (CDI) (CCH) 2,540.00p -2.04%
Shire Plc (SHP) 3,806.50p -1.67%
Royal Bank of Scotland Group (RBS) 253.90p -1.63%
British American Tobacco (BATS) 4,759.50p -1.50%
InterContinental Hotels Group (IHG) 3,930.00p -1.45%
Admiral Group (ADM) 1,971.00p -1.45%
Legal & General Group (LGEN) 263.90p -1.42%

FTSE 250 - Risers

IP Group (IPO) 142.90p 3.03%
Ferrexpo (FXPO) 278.10p 2.85%
Electra Private Equity (ELTA) 1,674.00p 2.01%
Centamin (DI) (CEY) 153.30p 1.46%
Rank Group (RNK) 228.20p 1.42%
Polymetal International (POLY) 946.00p 1.23%
Card Factory (CARD) 332.20p 1.06%
Petra Diamonds Ltd.(DI) (PDL) 92.80p 1.03%
Woodford Patient Capital Trust (WPCT) 101.00p 1.00%
TBC Bank Group (TBCG) 1,600.00p 0.95%

FTSE 250 - Fallers

Ocado Group (OCDO) 283.60p -2.91%
National Express Group (NEX) 359.70p -2.68%
Pershing Square Holdings Ltd NPV (PSH) 1,081.00p -2.35%
SIG (SHI) 174.60p -2.18%
Cranswick (CWK) 2,929.00p -1.97%
FDM Group (Holdings) (FDM) 927.50p -1.90%
Wizz Air Holdings (WIZZ) 2,816.00p -1.74%
Marshalls (MSLH) 413.20p -1.71%
Polypipe Group (PLP) 381.90p -1.70%
Balfour Beatty (BBY) 274.50p -1.58%
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