Inter. Pers. Share News (IPF)

LONDON (Alliance News) - London's main indices ended lower Friday for seventh consecutive session, with commodity stocks as the main drag after Brent crude prices hit seven-year lows.

The FTSE 100 index ended down 2.2% at 5,952.78 points, meaning it dropped 4.6% in the week as a whole. The blue-chip index touched 5,949.84 points, a level it hasn't reached since late-September.

Meanwhile, the FTSE 250 closed down 1.2% at 16,877.29, while the AIM All-Share finished down 0.8% at 725.40.

The sell off on equities also reached Europe and the US. The French CAC 40 and the German DAX 30 ended down 1.7% and 2.3%, respectively.

At the London close the pound was at USD1.5214, the euro was at USD1.0992. Gold was priced at USD1,075.62.

In New York, the Dow 30 was down 1.4% at the London close, while the S&P 500 was down 1.5%, and the Nasdaq Composite was down 1.6%.

Data from the US Commerce Department showed on Friday that US retail sales increased by slightly less than expected in the month of November, partly reflecting a continued decrease in auto sales.

The report said retail sales rose by 0.2% in November after inching up by 0.1% in October. Economists had expected sales to increase by about 0.3%. The upside for sales was limited by the drop in auto sales, which fell by 0.4% in November after dipping by 0.3% in the previous month.

Excluding the drop in auto sales, the Commerce Department said retail sales climbed by 0.4% in November after ticking up by a downwardly revised 0.1% in October.

Consumer sentiment in the US saw a slight improvement in the month of December, the University of Michigan revealed in a report on Friday. The University of Michigan said the preliminary reading on its consumer sentiment index for December came in at 91.8 compared to the final November reading of 91.3. However, economists had expected the index to inch up to 92.0.

Data from the Office for National Statistics showed UK construction logged modest output growth during October, though it was the first increase in three months. Construction output edged up 0.2% from September, when there was stagnation. Economists had forecast 1% growth. In August, output tumbled 2%.

London-listed oil stocks ended firmly in the red, after Brent oil price reached USD38.15 a barrel, a low it hasn't seen since December 2008. At the close, Brent was at USD38.18 a barrel.

Meanwhile, West Texas Intermediate was at USD35.87 a barrel after touching a level of USD35.76 a barrel, its lowest since early 2009.

The new lows were made after the Organisation of the Petroleum Exporting Countries said on Thursday its members pumped more oil in November than in any month since late 2008. The cartel also forecast little increase in demand for its crude next year.

This followed a press conference last week, in which OPEC said it will maintain oil production at current levels and refrained from outlining a production ceiling.

Royal Dutch Shell 'B' shares ended down 4.1% and its 'A' shares down 4.5%. BG Group fell 2.8%, while BP dropped 3.7%. In the FTSE 250, Premier Oil and Tullow Oil finished down 14% and 9.9%, respectively.

The FTSE 350 mining sector index went back to the red, ending down 4.4%, after two consecutive sessions finishing higher. The index fell on Wednesday to its lowest level since August 2004, albeit ending higher on that day, partially due to Anglo American's announcement on Tuesday of a radical restructuring plan and suspension of its dividend and partially because of lower commodity prices.

On Friday, Anglo American closed down 8.1%, BHP Billiton down 5.3%, Rio Tinto down 4.3% and Glencore down 4.0%.

"What is worrying is that this weekend brings with it the latest Chinese industrial production data, the kind of figure that, if it underperforms expectations, may only help escalate this current commodity collapse," noted Spreadex analyst Connor Campbell.

China's retail sales and industrial production data are due Saturday at 0530 GMT.

Old Mutual, down 11%, ended as the worst blue-chip performer, while Investec was down 11% in the FTSE 250, both continuing from their heavy declines on Thursday. The companies ended down as the South African rand trades near record lows against the dollar following the dismissal of finance minister Nhlanhla Nene.

Both companies, which derive a great deal of their earnings from South Africa, have suffered from the weakness of the rand, and further depreciation of the currency is unhelpful when translating earnings to report accounts in sterling. On Thursday, the two companies closed down 11% apiece.

Two weeks after the UK government said people purchasing buy-to-let homes will pay an extra 3.0% in stamp duty, international banking regulators have delivered a new blow to the sector.

The latest trouble for the buy-to-let sector comes from the Basel Committee, which is fresh from publishing its second consultative document on 'revisions to the standardized approach for credit risk'.

"Today we see a further headwind for buy-to-let lending in the UK: updated proposals for standardised credit risk, which suggest increasing risk weights to at least 70% for residential property where repayment is materially linked to cashflows generated by the property," Deutsche Bank's David Lock said in a note.

As a result, shares in buy-to-let lenders ended in the red, with OneSavings Bank down 9.7%, Aldermore Group down 6.5% and Virgin Money down 5.4%.

International Personal Finance ended down 8.2%, as the lender warned late Thursday it faces a hit from new legislation in Slovakia.

The company's Slovak business generated a pretax profit of about GBP6.0 million on revenue of about GBP43.0 million in the 12 months ended June 30, at which point it had a net receivables balance also of GBP43.0 million. International Personal Finance's update came one day after the Slovak parliament voted to adopt "previously undiscussed" proposals to amend various pieces of consumer legislation.

Shares in Bellway ended up 4.1%. The housebuilder continued the positive newsflow from the UK housebuilding sector as it said its reservation rate improved in the first months of its new financial year and that its total completions and average selling price are both set to rise in the full year.

The group said its reservation rate in the 18 weeks from August 1 to December 6 has increased 12% year-on-year to 165 homes per week. The strong start to the year led the group to forecast its total completions for the full year to the end of July 2016 will rise around 10% year-on-year, from the 7,752 it completed in its 2015 financial year.

Bellway added the average price of those completions will also rise by around 10%, meaning it expects its operating margin for the current financial year to increase about 21%, contributing to another anticipated improvement in its return on capital employed.

In a very light economic calendar Monday, Japan's industrial production data are due at 0430 GMT, while the same from the eurozone is due at 1000 GMT.

There are no events scheduled in the corporate calendar Monday.

By Daniel Ruiz; danielruiz@alliancenews.com

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