Hot Features
Premium
Trade like a pro: Leverage real-time discussions and market-moving ideas to outperform.
London open: WPP leads losses as FTSE follows US and Asia lower
London stocks fell in early trade on Thursday, taking their cue from heavy losses in the US and Asia, as advertising giant WPP took a beating on the back a disappointing third-quarter update.
At 0840 BST, the FTSE 100 was down 0.9% to 6,903.42, heading back down towards the 6,900 level last seen seven months ago. The pound was up 0.2% against the dollar at 1.2908 and 0.1% firmer versus the euro at 1.1319.
“That the pound has risen following yesterday’s meeting between Theresa May and the 1922 Committee, one that reportedly saw the PM escape with her leadership intact, contributed to the FTSE’s decline,” said Spreadex analyst Connor Campbell.
Neil Wilson, chief market analyst at Markets.com, said: “Is this the start of the long awaited bear market? Stocks crumbled yesterday in the US as investors shrugged off bumper earnings to look at the prospect of weaker growth next year.”
The Dow Jones declined more than 600 points, with cyclical and tech stocks were the biggest losers, with the Nasdaq ending down more than 4%, while the S&P 500 fell 3% and the Dow dropped 2.4% despite strong earnings from Boeing.
“The Nasdaq is now in correction territory while both the Dow and S&P have lost all their 2018 gains. It looks like the poor US housing stats yesterday acted as a warning and investors took fright. We’re in a period of pressure building to the downside as we get more down days than up and the breadth of the decline is important as is the volume,” said Wilson.
In UK corporate news, advertising group WPP tumbled 20% as it posted a drop in third-quarter revenues, cut its full-year revenue guidance and announced plans to sell a stake in its data division.
Hastings Group tumbled as the insurer reported a rise in nine-month gross written premiums but struck a cautious note on the wider outlook for the market.
The appointment of Philip Jansen, ex of Worldpay, as new chief executive of BT Group did nothing to help the shares in early trading.
Likewise, Polypipe slipped despite announcing the acquisition of Manthorpe Building Products, which makes moulded and extruded plastic and metal products for the UK and Irish markets, for £52m.
Relx ticked a touch lower despite reporting a 4% increase in nine-month underlying revenue while chemicals company Elementis lost ground even as it said it had delivered a “resilient” third quarter.
On the upside, precious metals miners were back in favour as investors looked for safe havens, with Randgold Resources and Fresnillo the top performers.
Lloyds Banking was in the green as it reported flat underlying profits for the third quarter and revealed that chief financial officer George Culmer will retire next year.
Kaz Minerals advanced as it reported a jump in third-quarter copper production while Aveva nudged up after the engineering and industrial software provider said it continued to perform well in the first half of its financial year.
Embattled department store group Debenhams hit a new all-time low in early trading but popped higher as it unveiled more aggressive restructuring plans, with up to 50 stores to be closed in the coming three-to-five years.
In broker note action, Rolls-Royce was lifted to ‘buy’ at Oddo while Segro was upgraded to ‘add’ at AlphaValue.
Anglo American was boosted to ‘buy’ at SocGen, but Rio Tinto was cut to ‘hold’.Informa was upgraded to ‘add’ at Peel Hunt.
Ferguson, ITV, Rolls-Royce, Coats Group, Dechra, Howden Joinery, JD Wetherspoon and William Hill were among the companies whose stock went ex-dividend.
