(MENAFN- ProactiveInvestors - UK) The FTSE 100 index closed lower in a widespread sell-off while the pound flirted with its lowest level against the euro since the Brexit vote.
The blue-chip ticker was 1.3% down at 6,818 alongside European bourses and never once saw any upside this session. Meanwhile, against the euro, sterling traded at €1.1494, close to its lowest level since the Brexit vote to quit the European Union in June.
Intercontinental Hotels (LON:IHG) was the biggest faller, dropping 5.7% to 3098p after Morgan Stanley cut its rating on the stock to "underweight" from "equalweight".
Lloyds Banking Group was another company to suffer from a downgrade, falling 3.1% to 5425p after Goldman Sachs downgraded the bank's shares to "sell" from "neutral".
Banking stocks across Europe were also under pressure after shares in Germany's Deutsche Bank fell nearly 7% to its lowest level since the 1980s and its US-listed ADRs to their lowest levels in over 16 years. The bank's shares were hit following reports at the weekend that the German government had ruled out state aid for the company and also said it would not intervene in the lender's dispute with US regulators of the severity of a fine.
The FTSE 250 index of midcap stocks fell 1.1% to 17,721 and led by Sports Direct International (LON:SPD) down 6% to 284.5p on profit-taking. On Friday the stock jumped after Sports Direct announced the shock resignation of chief executive Dave Forsey and his immediate replacement by the retail chain's founder and deputy chairman Mike Ashley. The company had suffered months of mounting pressure from various quarters for the workplace practices at its Shirebrook warehouse in Derbyshire and the company's poor corporate governance.
There was happier news on Monday for small-cap stocks, which eked out gains. The FTSE AIM 100 Index ended up 0.1% at 3900 and the FTSE AIM All-Share Index up 0.1% at 816.
The state of the London was well illustrated by how many stocks rose and fell. Only 20% of London stocks gained – one of the lowest readings this year – and another 44% of stocks fell. Some 36% of stocks remained unchanged.
The overall top riser was Progility (LON:PGY) which gained 37% to 1.575p. On September 16 the healthcare PR agency issued a statement saying it did not know why its stock had jumped. On September 26 the company was due to release its first-half results but no further communication has been realised.
The top faller was Csf Group (LON:CSFG) which dropped by 51% to 0.425p after the company said it will seek shareholder approval to de-list from the AIM exchange. In a statement the company said 'the Directors have concluded that the commercial disadvantages and costs of maintaining the admission to trading on AIM of the Ordinary Shares at this time in the Company's development outweigh the potential benefits.'
Markets were also jittery ahead of a televised debate between US presidential hopefuls Donald Trump and Hillary Clinton which screens at 2100 ET (0200 BST Tuesday).
Midsession
The Footsie opened sharply lower and stayed there throughout the morning session as investors wait on developments from abroad.
The meeting of oil producers in Algiers this week is engaging the minds of the oil sector watchers while politicos are looking forward to tonight's televised US presidential debate between Hillary Clinton and Donald Trump.
The FTSE 100 was off 84 points at 6,825 at 12.30pm, with house builders prominent among the losers as the British Bankers Association reported that mortgage approvals for house purchases fell for the third month in a row in August to hit a 19-month low.
'We expect house prices to be essentially flat over the final months of 2016. While softer housing market activity is likely to limit house prices, we suspect that the current resilience of the economy and a shortage of properties will prevent prices from falling over the final months of 2016,' speculated Howard Archer, the chief UK & European economist at forecasting unit IHS Global Insight. Archer reckons house prices will dip slightly in 2017, possibly by as much as 3%.
There was zero news flow from the top tier companies this morning but medicinal cannabis heavyweight GW Pharmaceuticals PLC (LON:GW), valued at £2.3bn, caught the eye as it announced the second positive Phase 3 trial for Epidolex, its treatment for epilepsy in children.
The shares were briefly on a 52-week high of 814.05p before coming down to 773p, which was still a handy 73p increase on the day.
Sector peer Summit Therapeutics PLC (LON:SUMM) was 8.2% higher at 139p as the US Food and Drug Administration awarded fast-track status for the company's treatment of Duchenne muscular dystrophy, a fatal muscle wasting disease that affects boys and young men.
Read Summit Therapeutics' DMD treatment granted US fast track status
With not much else to excite among the market's big names, traders homed in on small cap plays, such as Altitude Group PLC (LON:ALT), which was up 28%. Company chairman Peter Hallett put his hand in his pocket and bought 55,000 shares in the technology solutions provider in the wake of last year's half-year results.
Open
Having added a couple of hundred points last week, the FTSE 100 gave back 80 of those points in early trading.
The focus has shifted from last week's market-friendly statement from the US central bank to this week's meeting of the oil producers' cartel Opec in Algiers, and this evening's US televised presidential debate between Donald Trump and Hillary Clinton.
'Expect conflicting comments from the likes of Saudi Arabia and Iran and tensions persist amongst oil producers,' is the view of Ana Thaker, market economist at PhillipCapital UK on the Opec meeting.
'Oil dropped 4% on Friday on the expectation that Saudi Arabia would be unable to come to a deal with other members; however, other oil producers sound more optimistic,' Thaker noted.
The FTSE 100 was down 81 points at 6,828 after an hour's trading, with hotels group Intercontinental Hotels Group PLC (LON:IHG) the biggest blue-chip faller, down 4.2% at 3,146p after Morgan Stanley issued a research note and an 'underweight' recommendation.
House builders were out of favour, with Taylor Wimpey PLC, Persimmon PLC and Barratt Developments PLC all shedding more than 3%, while retail investors' favourite Lloyds Banking Group PLC (LON:LLOY) was also down 3% after Goldman Sachs moved from 'neutral' to 'sell'.
With just four FTSE 100 components in the blue, the bulls had to look to the lower tier for good news stories.
Top of the tree was Zoltav Resources Inc (LON:ZOL) on the back of half-year results.
The Russia-focused oil and gas exploration and production company shot up 29% as it posted a maiden profit before tax of US$1.6mln, versus a loss the year before of US$2.5mln.
Full-year results from gold recovery specialist Goldplat PLC (LON:GDP) got the thumbs-up from the market. The shares climbed 11% as it revealed production was up 23% to 37,666 ounces (oz) in the year to the end of June, with most of that (35,661oz) coming from the company's recovery operations in South Africa and Ghana.
Read Goldplat swings to a profit in glittering year Read Greatland acquires gold-copper project in Western Australia
Elsewhere in the precious metals sector, Greatland Gold PLC (LON:GGP) hardened 8% to 0.20p as it acquired the Havieron gold-copper project in Western Australia in a deal that could be worth up to A$750,000.
Away from the resources sector, Myanmar-focused social media and gaming platform firm MySQUAR Ltd (LON:MYSQ) got off to a flying start, rising 20% on news that its latest mobile game Hawk Hero continues to sell well after its launch a couple of weeks ago.
Those early gains had been halved by 9.00am, as investors picked up on a small delay in the launch of the company's online payments platform.
Active Energy Group PLC (LON:AEG) was wanted as it revealed it is expecting a bumper end to the year.
The timber processing, forestry management and renewable energy company said work is underway to increase output at its wood processing operation near Odessa, in Ukraine, by a third to 4,000 tonnes per day.
It should reach that landmark in the fourth-quarter, the company said in its interim results statement.
Opening snapshot at 8.20am
The FTSE 100 opened 48 points up at 6,860.
The top winner wasMediclinic International (LON:MDC), up just under 1% to 956.5p.
Intercontinental Hotels Group (LON:IHG) was the biggest loser, down 4% to 3,160p.
Preview at 6.51am
A US presidential debate and horse trading by the world's oil barons in Algiers are likely to dominate market sentiment Monday with the FTSE 100 set to open in the red.
The spread betters are indicating the index of blue-chip shares will fall 24 points to 6,885.43 when trading begins.
Donald Trump and Hillary Clinton go head to head for the first time on TV this evening, with the candidates neck and neck.
A decent showing from the Republican nominee could see a shift into safe haven assets, analysts said, with the world a slightly more volatile place with the Maverick Trump in charge.
Before that, politics is of the global, strategic and economic variety take centre stage with the meeting of OPEC and non-OPEC nations in the side rooms of the International Energy Forum in Algeria, which kicks off later Monday.
The Saudis seemed to intimate Friday there was little scope for the much-hoped-for production cuts, with still Iran unwilling also to play ball.
But the mood music mellowed a little when the hosts suggested that all options remained open. Whether this was uttered more in hope that expectation remains to be seen.
Anyway, oil traders took a little heart with Brent crude nudging up a smidge (0.8%) to US$46.31 a barrel overnight.
In Asia trading was somewhat subdued though all the main markets there remaining in negative territory.
The Nikkei and Shanghai indexes were off 0.8% and 0.9% respectively, while Hong Kong fell 0.7%.
Back here in the UK and analysts and traders are expecting a busier week than we've seen for a while in terms of scheduled corporate news.
This week we have updates of differing varieties from Sainsbury, Merlin Entertainments, TUI travel, Carnival, Wolseley and Smiths Group.
Gold 0.8% lower at US$1,336.70 per ounce Pound worth US$1.2226 City Headlines
*Senior financiers are alarmed at growing political momentum behind a so-called 'hard Brexit' that they fear will erode business confidence, trigger corporate departures and damage the City of London – FT.
*The UK's decision to leave the EU will not dent growth at all this year, according to economic forecasts compiled by the Treasury, in a complete reversal of the gloomy short term forecasts made after the EU referendum – Telegraph.
*HSBC has kicked off the search for its next-but-one chief executive by hiring a head hunter to assess the strength of its most promising Managers and benchmark them against the best rivals externally – FT.
*Liberty Media's US$4.4bn takeover of Formula One could be facing a roadblock after an alleged conflict of interest emerged at the heart of the deal – Telegraph.
*Tesco could be called before the Commons inquiry into workplace pensions amid claims that the hole in its pension fund could be up to £6.5bn – Times.
*The ousted boss of Quindell has been forced to take a near-£1mln hit on a delisted broker, about a year after he was talking up the investment – Times.
*Mobile phone provider O2 is thought to be gearing up to list on the stock exchange in a flotation which would value the business at £10bn – Daily Mail.