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(Alliance News) - Stock prices in London were lower at midday on Friday as concerns over the future of heavily indebted Evergrande Group mounted, alongside lingering worries over rising inflation.
The embattled Chinese property firm's silence over a bond payment fuelled uncertainty among investors concerned that its potential collapse could spill over into the broader economy.
Evergrande shares ended down 4.4% in Hong Kong.
The FTSE 100 index was down 18.02 points, or 0.3%, at 7,060.40. The UK flagship index is still on track to end the week up 0.4%.
The mid-cap FTSE 250 index was down 179.40 points, or 0.8%, at 23,650.78. The AIM All-Share index was down 3.64 points, 0.3%, at 1,268.76.
The Cboe UK 100 index was down 0.3% at 701.90. The Cboe 250 was down 0.8%, at 21,436.30. The Cboe Small Companies was 0.1% lower at 15,583.80.
In mainland Europe, the CAC 40 stock index in Paris was down 1.0% and the DAX 40 index in Frankfurt was down 0.7%.
US stock market futures were pointed to a lower open. The Dow Jones Industrial Average was called down 0.3%, the S&P 500 down 0.4%, and the Nasdaq Composite down 0.5%.
"Markets flashed red across Europe as uncertainties remained over the future of troubled Chinese property developer Evergrande, with no news on whether it had made its latest bond interest payment," said Russ Mould, investment director at AJ Bell.
"Persistent and rising inflation would suggest that central banks have to act soon to get the situation under control which means interest rate hikes sooner rather than later. However, there is a bleak winter ahead given pressure on energy prices, supply chain problems and a sharp hike in the cost of living," Mould added.
In the FTSE 100, AstraZeneca was up 2.3% after the drugmaker announced positive results from the PROpel phase three trial of Lynparza.
The Anglo-Swedish firm said that the PROpel phase three trial for Lynparza achieved its primary endpoint of radiographic progression-free survival in men with metastatic castration-resistant prostate cancer, compared to standard-of-care abiraterone.
Interim analysis by the Independent Data Monitoring Committee concluded that the trial met the primary endpoint in men which had not received treatment in the first-line setting including new hormonal agents or chemotherapy.
Shares in oil majors Royal Dutch Shell 'A', Shell 'B' and BP were up 0.6%, 0.5% and 0.3% respectively, tracking spot oil prices higher.
Brent oil was quoted at USD77.74 a barrel Friday at midday, up sharply from USD75.94 late Thursday - its highest level since October 2018.
"Oil prices have been rising in recent days due to a growing demand-supply imbalance. Oil supply, in particular, has been unable to keep up with rising demand due to disruptions caused by storms in the Gulf of Mexico. As a result, crude oil inventories in the US continue to decline," said AvaTrade analyst Naeem Aslam.
Conversely, JD Sports Fashion was down 2.7% as the sportswear retailer suffered a negative read-across from Nike.
The US athletic apparel maker late Thursday reopened first quarter results which missed consensus estimates. The stock was down 4.5% in pre-market trade in New York.
In the period ended August 31, Nike's revenue climbed 16% annually to USD12.25 billion from USD10.59 billion a year earlier. Quarter-on-quarter, revenue declined 0.8%. The first-quarter top line came in below CNN-cited consensus of USD12.5 billion.
On the subsequent conference call, Nike said sales may fall as factory closures in Vietnam prevent the company from keeping up with consumer demand.
"Several of our factory partners in Vietnam and Indonesia were required to abruptly cease operations in the first quarter. As of today, Indonesia is now fully operational, but in Vietnam, nearly all footwear factories remain closed by government mandate. Our experience with Covid-related factory closures suggest that re-opening and ramping back to full production scale takes time," Nike said.
As such, Nike said full-year revenue will be in the mid-single-digits rather than a low double-digit percentage rate it earlier targeted.
German sportswear brand Adidas was also down 2.8% in Frankfurt.
In the FTSE 250, Mitie Group was up 2.3% after the outsourcer raised its profit guidance due to a series of Covid-linked contract awards.
Mitie said it now expects to deliver operating profit of between GBP145 million and GBP155 million in its financial year ending March 31, 2022. Operating profit before items was GBP63.4 million in financial 2021 and GBP86.1 million in financial 2020.
Meanwhile, Oxford Nanopore Technologies is targeting a valuation of GBP3.8 billion in its initial public offering in London next month, Bloomberg reported.
The company plans to raise GBP350 million from new shares in the IPO, the report said, citing terms seen by Bloomberg. That's up from the GBP300 million the company said it would raise in its intention to float published on Thursday last week. In addition, existing investors will sell up to GBP126 million of shares.
The shares will be marketed at 375 pence to 450p each until Thursday next week, and start trading on the Friday, Bloomberg said.
The GBP3.8 billion valuation would be about 53% higher than the GBP2.48 billion Oxford Nanopore achieved in a funding round in May.
In addition, Peel Hunt said it has raised GBP112 million in a placing of 49.1 million shares at 228 pence each ahead of its IPO on AIM next Wednesday.
Founded in 1989, Peel Hunt provides corporate broking and advisory research, sales and trading in London's small-and mid-cap stocks. It counts JD Sports as a corporate client.
Peel Hunt said that, based on the placing price, its market capitalisation upon admission will be GBP280 million. The IPO placing attracted strong support from "high quality" institutional investors and retail investors and was comfortably over-subscribed, it noted.
Peel Hunt said the IPO raised GBP40 million for company and GBP72 million for selling shareholders. The company will use its new funds to establish a European presence, while also investing in technology.
Also on the IPO front, Tortilla Mexican Grill said it is aiming to hit the AIM market of the London Stock Exchange on or around October 8.
London-based Tortilla Mexican Grill is a fast-casual Mexican-themed restaurant chain with 62 sites worldwide, 52 of which is in the UK and 10 are franchised sites in the Middle East. Two of the UK sites are franchised to Select Service Partners UK Ltd, which is part of FTSE 250-listed SSP Group.
The pound was quoted at USD.3705 at midday on Friday, down from USD1.3736 at the London equity market close on Thursday.
The euro was priced at USD1.1734, little changed from USD1.1735. Against the Japanese yen, the dollar was trading at JPY110.44, up from JPY110.18.
Gold stood at USD1,755.47 an ounce at midday, higher against USD1,748.28 late Thursday.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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