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London close: FTSE 100 drops over 1% as oil and mining stocks drop

Mon, 08th Dec 2014 16:29

Weakness in the oil and gas sectors and poor economic data from across the globe prompted a weak start to the week for the UK stock market, as equities pulled back from a two-week high.With crude prices tumbling to their lowest in over five years, oil producers and stocks in the oil services sectors were registering sharp losses by the end of trade. Meanwhile, mining shares were weighed down by yet more disappointing data from top metals user China, where imports unexpectedly declined last month."Traders are coming to the realisation that without a new round of monetary easing from Beijing, there is little reason to buy mineral-related companies. There is no sign of the collapse in commodity stocks coming to an end any time soon," said analyst David Madden from IG.London's FTSE 100 settled at 6,672, down 1.05% on the day after closing Friday's session at 6,742.84, its highest close since 21 November.Global markets had finished last week strongly after the news that the US economy added 321,000 non-farm payrolls in November, its biggest monthly gain in three years. The better-than-expected data pushed both the S&P 500 and Dow Jones to new record highs on Wall Street on Friday, but both indices were retreating on Monday.Sentiment was dampened early on after it was revealed the contraction in Japan was worse than originally thought in the July-September period, as investment and public spending increased by less than expected. Japanese gross domestic product shrank at an annual rate of 1.9%, compared with the initial estimate of a 1.6% contraction.China's trade surplus rose to a record high in November, but annual export growth was much weaker than expected at 4.7% and analysts were caught off guard by a surprise 6.7% decline in imports.Meanwhile, industrial production in Germany increased by just 0.2% in October, disappointing analysts who had expected 0.4% growth.Oil-related stocks slideOil producers such as Tullow Oil, Shell, BP, Afren and Ophir Energy were falling as oil prices slumped, along with shares of engineering companies exposed to the energy market such as Weir Group, Petrofac and Hunting. Brent crude dropped as much as 3.1% to $66.94 a barrel on Monday, its worst level since October 2009.Mining stocks were pressured lower by the weaker-than-expected Chinese data including BHP Billiton, Anglo American Rio Tinto and Glencore. Analysts at both Canaccord Genuity and JPMorgan Cazenove lowered their target prices for BHP.Retailer M&S dropped after problems with the firm's delivery service, as customers were warned that Christmas orders could take up to two weeks to arrive. The delay follows a backlog of Black Friday orders, which have also caused the next-day delivery service to be suspended.Financial services group Hargreaves Lansdown was also extending losses made on Friday after the surprise departure of its chief financial officer Tracey Taylor after 15 years with the firm.UK grocery chain J Sainsbury was also in focus after reports that an activist fund is talking with investors about buying up shares in the retailer. The Sunday Telegraph said Crystal Amber is looking to build a stake "as part of a bold plan that could see an attempt to engineer a takeover of the supermarket giant". The stock jumped early on but finished the session in the red.Insurer Esure dropped after agreeing to buy the remaining 50% stake of price-comparison group Gocompare.com for £95m. The deal will increase Esure's ownership of Newport-based Gocompare to 100% after its initial investment in 2010.Supergroup was feeling the heat with shares dropping sharply ahead of the fashion retailer's half-year results later this week. "The owner of the brand SuperDry has warned on profits twice this year already, and traders aren't taking any chances!" said IG's Madden. Market MoverstechMARK 2,969.51 -0.35%FTSE 100 6,672.15 -1.05%FTSE 250 15,952.47 -0.32%FTSE 100 - RisersARM Holdings (ARM) 963.00p +1.74%Admiral Group (ADM) 1,285.00p +0.55%TUI Travel (TT.) 452.20p +0.49%Friends Life Group Limited (FLG) 381.80p +0.34%Bunzl (BNZL) 1,820.00p +0.33%ITV (ITV) 213.90p +0.33%Ashtead Group (AHT) 1,104.00p +0.27%IMI (IMI) 1,222.00p +0.25%Aviva (AV.) 507.00p +0.20%Experian (EXPN) 1,057.00p +0.19%FTSE 100 - FallersWeir Group (WEIR) 1,741.00p -5.28%easyJet (EZJ) 1,705.00p -3.18%Hargreaves Lansdown (HL.) 962.50p -2.88%Marks & Spencer Group (MKS) 483.50p -2.70%Royal Dutch Shell 'B' (RDSB) 2,171.50p -2.65%BHP Billiton (BLT) 1,437.00p -2.51%Royal Dutch Shell 'A' (RDSA) 2,095.50p -2.49%CRH (CRH) 1,544.00p -2.22%SABMiller (SAB) 3,350.00p -2.10%Smiths Group (SMIN) 1,122.00p -2.01%FTSE 250 - RisersAO World (AO.) 285.00p +9.40%Acacia Mining (ACA) 251.30p +6.30%Ocado Group (OCDO) 350.70p +3.79%Poundland Group (PLND) 330.70p +3.57%FirstGroup (FGP) 112.70p +3.49%Playtech (PTEC) 674.50p +2.43%Hays (HAS) 143.20p +2.36%Centamin (DI) (CEY) 50.75p +2.30%Riverstone Energy Limited (RSE) 895.00p +2.29%Genus (GNS) 1,351.00p +2.27%FTSE 250 - FallersAfren (AFR) 41.27p -10.01%Supergroup (SGP) 855.50p -7.21%Lonmin (LMI) 167.20p -6.12%Ophir Energy (OPHR) 131.50p -4.78%Entertainment One Limited (ETO) 315.00p -4.37%Hochschild Mining (HOC) 82.65p -4.17%esure Group (ESUR) 206.60p -3.59%Soco International (SIA) 262.30p -3.42%Saga (SAGA) 150.00p -3.16%Ted Baker (TED) 2,072.00p -3.00%
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