London midday: Losses deepen as North Korea missile launch sparks flight to safety

Tue 29 Aug 2017

LONDON (SHARECAST) - (ShareCast News) - London stocks had extended losses by midday on Tuesday as North Korea's missile launch over Japan sparked jitters across financial markets, prompting a flight to safety.
The FTSE 100 was down 1.2% to 7,314.50, while the pound was up 0.1% versus the dollar at 1.2951. The dollar was down 0.7% against the yen at 108.53, while the dollar index fell to 91.788, marking its lowest level since January 2015. Meanwhile, the euro broke above the 1.20 versus the greenback for the first time since the start of 2015, trading up 0.6% at 1.2050.

Gold prices hit an 11-month high as investors looked for somewhere safe to park their cash, while the VIX Volatility index rose around 25% to 14.16.

In oil markets, West Texas Intermediate was down 0.1% at $46.54 a barrel and Brent crude was off 0.8% at $51.48 as Tropical Storm Harvey meant that around 13% of US refining capacity was shut down.

Oanda analyst Craig Erlam said: "A ramp-up in tensions between North Korea and the US, South Korea and Japan overnight has raised geopolitical risk once again, with Kim Jong Un showing no signs of ceding to international pressures. The missile launch comes as no surprise given proximity to the annual military exercises between the US and South Korea, but the fact that the missile was shot over Northern Japan and prompted warning sirens encouraging people to take cover is a concern."

Precious metals miners bucked the trend, with Randgold Resources, Fresnillo, Hochschild and Acacia all higher thanks to the rally in gold prices.

Elsewhere, distribution and outsourcing group Bunzl edged lower despite reporting a jump in interim pre-tax profit of 17%.

Mitie was in the red after the City watchdog began to probe the timing and preparation of a profit warning last September. Mitie revealed on Monday that the Financial Conduct Authority had on Friday told the facilities management outsourcing group that an investigation "in connection with the timeliness" of the profit warning that was announced by the company on 19 September 2016.

AstraZeneca retreated despite announcing that the US Food and Drug Administration has approved Faslodex (fulvestrant) 500mg as monotherapy for expanded use in women with hormone-receptor positive human epidermal growth factor receptor 2 negative advanced breast cancer, who have gone through menopause and have not received previous endocrine therapy.

Grainger slipped after agreeing to acquire a 375-home build-to-rent development in Salford, North West England for roughly 80m, while Restaurant Group and Tullow Oil were hit by broker downgrades.

Oilfield services company Hunting gushed lower after announcing the appointment of John Glick as non-executive chairman of the board with effect from 1 September, when Richard Hunting will step down after 26 years as chairman.

Polymetal rallied after its first-half earnings per share came in better than expected.

Investors were also digesting the latest survey from Nationwide, which showed that house price growth in the UK slowed to 2.1% in August from 2.9% in July, while month-on-month, prices fell 0.1% compared with a 0.2% increase the month before and expectations of a 0.1% gain.

Market Movers

FTSE 100 (UKX) 7,314.50 -1.17%
FTSE 250 (MCX) 19,509.46 -0.82%
techMARK (TASX) 3,353.15 -1.13%

FTSE 100 - Risers

Randgold Resources Ltd. (RRS) 7,865.00p 3.90%
Fresnillo (FRES) 1,621.00p 2.59%
Ashtead Group (AHT) 1,593.00p 0.44%
Coca-Cola HBC AG (CDI) (CCH) 2,611.00p 0.42%
SEGRO (SGRO) 529.00p 0.28%
Severn Trent (SVT) 2,254.00p 0.22%
British Land Company (BLND) 604.00p 0.17%
United Utilities Group (UU.) 914.00p 0.11%
Babcock International Group (BAB) 803.50p 0.06%
Intertek Group (ITRK) 4,944.00p -0.08%

FTSE 100 - Fallers

Morrison (Wm) Supermarkets (MRW) 243.60p -3.10%
ITV (ITV) 156.40p -2.80%
CRH (CRH) 2,649.00p -2.61%
Smiths Group (SMIN) 1,526.00p -2.49%
Standard Life Aberdeen (SLA) 431.00p -2.40%
Lloyds Banking Group (LLOY) 63.42p -2.30%
Smurfit Kappa Group (SKG) 2,298.00p -2.17%
Royal Mail (RMG) 385.30p -2.01%
Ferguson (FERG) 4,449.00p -2.00%
Tesco (TSCO) 180.55p -1.98%

FTSE 250 - Risers

Hochschild Mining (HOC) 286.50p 7.18%
Acacia Mining (ACA) 212.50p 5.51%
IP Group (IPO) 118.30p 2.42%
Millennium & Copthorne Hotels (MLC) 462.00p 2.42%
Centamin (DI) (CEY) 156.30p 1.96%
Redrow (RDW) 610.50p 1.50%
McCarthy & Stone (MCS) 165.00p 1.48%
Vedanta Resources (VED) 833.50p 1.40%
Domino's Pizza Group (DOM) 269.40p 1.28%
Big Yellow Group (BYG) 772.50p 1.11%

FTSE 250 - Fallers

Hunting (HTG) 381.20p -5.20%
Restaurant Group (RTN) 308.00p -4.61%
Tullow Oil (TLW) 150.10p -4.09%
Softcat (SCT) 395.50p -3.65%
Weir Group (WEIR) 1,753.00p -3.31%
Hiscox Limited (DI) (HSX) 1,244.00p -3.27%
Dixons Carphone (DC.) 176.70p -3.18%
Cairn Energy (CNE) 174.20p -3.17%
Lancashire Holdings Limited (LRE) 672.50p -3.17%
Spectris (SXS) 2,354.00p -2.85%
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