FTSE 100 tumbles as Osborne pulls Lloyds share sale and oil surges

Market Report: Ashtead slumps on United Rentals read-across

An information screen displaying the FTSE 100, which has risen above 7,000 mark for the first time and hit a new record high, at the London Stock Exchange in Paternoster Square, London, Friday March 20, 2015.
FTSE climbs despite cautious tone from Fed. Credit: Photo: PA

18:00

Market Report: Ashtead slumps on United Rentals read-across

17:46

US stocks turn positive

Gains in energy companies helped US stock markets claw back into positive territory following an extremely volatile start to trading.

Dow Jones +0.54pc

Nasdaq +1.4pc

S&P 500 +0.56pc

17:40

South Africa's rand rallies

The South African rand hit its highest level in three weeks after the central bank lifted the benchmark interest rate by 50 basis points - as was expected.

The rand rallied as a result - up by more than 1.5pc.

Last year, the rand depreciated by 25pc amid concerns of a slowdown in the region, as well as Chinese-led malaise.

16:40

European shares close in the red

The rally in oil prices couldn't save European bourses from another round of heavy losses.

FTSE -0.98pc

DAX -2.3pc

CAC -1.23pc

IBEX -1.57pc

15:32

More negativity...

US stocks turn negative an hour into trading - down around 0.3pc.

With one hour to go for European stocks, the FTSE 100 has come well off its 6,000 high today to slump 1.61pc to 5,893.

The DAX is off by 2.1pc, while the CAC has lost 1.5pc.

15:20

Final green light for Shell-BG takeover sends shares higher

Shares in BG Group rose 2pc as the final green light is given to the merger with Shell. Royal Dutch Shell B shares jumped 3.4pc.

Jillian Ambrose writes:

BG Group shareholders have voted through Shell’s £40bn takeover bid by an overwhelming majority.

The widely expected final nod for the landmark energy merger was voted through with 99.55pc of BG investors in favour, ending a controversial nine month campaign by Shell to cement its new strategic direction.

The tie-up received an 83pc approval vote from Shell shareholders on Wednesday, despite early fears that the deal was overpriced due to the collapse of oil prices since the bid was made last April.

Read more here

15:12

US stocks rise depsite poor durable goods figures

US stocks appeared unaffected by a tumble for new orders for manufactured goods in December, thanks to a jump in oil prices.

Durable goods orders fell 5.1pc last month.

Connor Campbell, of SpreadEx, said: "Despite a far worse than expected core durable goods order and a solid, if unspectacular, jobless claims number, the Dow Jones managed to open around 100 points higher this Thursday, jumping past the 16000 level it abandoned yesterday."

The Dow Jones is currently 0.4pc higher, while the Nasdaq is up 0.7pc.

14:39

Iran to challenge any deal on oil cuts

Oil prices ease back amid reports Iran will challenge any deal among oil producers.

14:35

Wall Street jumps at opening bell

US stock markets welcomed the opening bell after Russia's energy minister Alexandar Novak said that Saudi Arabia had proposed that oil producting countries cut production by up to 5pc.

In its wake, brent crude surged, while US stocks jumped minutes after opening. The Nasdaq climbed 1.4pc, while the Dow Jones Industrial average index advanced 0.7pc.

However, Mr Novak also said the major of production cuts was "a subject for discussions" and that it was "too early to talk about".

14:23

Oil hits three-week high

Brent crude leapt to $34.90(up 5.44pc) after reports from Interfax suggested Opec and other oil producers will meet next month to discuss a potential output cut.

The report said Russia's energy minister Alexander Novak said that a 5pc cut may be discussed at the meeting.

14:14

Brent crude jumps to $34 on production cut reports

13:46

Copper slides.... miners follow

Copper slid 1pc today to $4,545 on the London Metal Exchange after hitting a three-week high yesterday.

The move downwards came as the market began to factor in slower activity in China ahead of the New Year holiday.

The industrial sector in the region stalls during the week long Lunar New Year (it starts on February 8) but the slowdown generally begins the week before.

As copper began tumbled, miners eased back (with the exception of Anglo American who recorded increased production). Glencore slipped 2.2pc to 90.1p, while BHP Billiton lost 0.2pc to 669.1p and Rio Tinto dipped 0.4pc to £17.11.

12:59

No 'genuine' recession on the Chinese horizon

China-led malaise has sent stock markets in "a tailspin" so far this year, but things are not all “doom and gloom”, said Yael Selfin, Head of Macroeconomics at KPMG.

“Latest GDP figures from China show the economy grew by 6.9pc in 2015, indicating that the authorities are still on course to deliver the ambitious transformation of the economy, despite recent mishaps when dealing with increased market volatility exacerbated by poor communication.”

“There are still many challenges ahead: falling prices are putting further pressure on indebted businesses, and many state owned companies have a long way to go before they become independently viable, but there is no genuine recession on the Chinese horizon.”

12:48

US markets set to open marginally lower

In the wake of the Fed's policy statement yesterday, when it kept interest rates unchanged and said it was "closely monitoring" the global economic developments, US stock markets are expected to open marginally lower.

Dow Jones index futures are 0.1pc lower, while the S&P and Nasdaq index futures are 0.1pc and 0.6pc down, respectively.

Connor Campbell, of SpreadEx, said: "It’s now down to the US open to rescue the markets from more negativity; however the Dow futures have gradually seen their gains shrink as the day has continued and could easily have disappeared by the time the bell rings on Wall Street.

"A turnaround could occur dependent on the state of this afternoon’s US data; however, with the core durable goods orders forecast at -0.1pc against 0.0pc last month barely countered by an expected drop in jobless claims, investors may be left wanting."

12:12

Southeast Asian stock markets close higher

China's panic-selling in late trading didn't impact southeast Asian stock markets today, as the gains in oil helped them close marginally higher.

In the Philippines, its main stock market advanced 0.9pc, while Thailand added 0.8pc and Sinagore and Indonesia made gains of 0.6pc and 0.4pc, respectively.

12:08

Can't sell Lloyds shares at a loss?

12:01

Markets at midday

It's a sea of red across Europe after a volatile morning trading session.

FTSE -1.12pc

DAX -1.91pc

CAC -1.48pc

IBEX -1.72pc

11:56

Lloyds share sale delay 'understandable'

11:40

Osborne postpones Lloyds share sales until markets calm

Chancellor George Osborne has said that the government will postpone its sale of shares in bailed-out bank Lloyds due to the continued turmoil across global financial markets.

The government had planned to reduce its stake in the bank via a scheme early this year. Shares quickly fell 1.7pc.

Tim Wallace writes:

Chancellor George Osborne has postponed the planned sell-off of the last of the Government's shares in Lloyds Banking Group.

The retail sale of shares was planned for the spring, however market volatility meant "now is not the right time", the Chancellor said.

The taxpayers' stake in the bank has been slashed from 43.5pc to below 10pc through a series of sales.

Institutional shareholders have taken part in several offerings of shares, and investment bankers from Morgan Stanley have been selling shares on the government's behalf whenever Lloyds' share price was above the break even price of 73.6p.

Read more here

11:30

First Group falls on profit warning

Shares in First Group were in reverse this morning. The FTSE 250 stock slumped 9pc to 93p to the bottom of the mid-cap index after the group warned on profits.

Mehree Khan writes:

Travel operator FirstGroup has warned its profits will suffer after many areas of Britain were hit by severe flooding last year.

FirstGroup's revenues fell by 9.5pc in the three months to December 26 and it said its operating profits for the year would now be "slightly lowered".

The FTSE-250 company's First Bus revenues fell on the back of weaker-than-expected retail footfall following the "exceptionally wet weather and flooding in some markets". Like-for-like revenues were flat, while commercial passenger revenue inched up by 0.9pc.

Read more here

11:11

The six-year old bull market

11:08

Best week for Anglo American since October

Anglo American is on track for its best weekly performance since early October after it revealed it increased production at its Minas-Rio mine in Brazil.

So far this week the FTSE 100 stock has made gains of more than 20pc.

Jon Yeomans writes:

The falling price of metals and minerals has not deterred Anglo American from stepping up its output.

The embattled FTSE 100 miner, which is in the midst of a radical plan to shrink in size by almost two-thirds, increased its production by 5pc in 2015.

The bulk of that increase was down to a 25pc rise in platinum production during the year – despite the price of the precious metal tumbling by around the same amount amid a supply glut.

Read more here

10:53

Gold climbs on safe-haven demand

Demand for safe-haven assets continues to drive the price of gold higher amid persistent concerns about the state of the global economy. Gold climbed 1pc this morning to $1,128.16. In its wake FTSE 100 gold miners Randgold Resources and Fresnillo also found support - up 0.8pc and 1.3pc, respectively.

Mike van Dulken, of Accendo Markets, said: "Gold is back testing rising support again having come back from a test of $1127 yesterday. We’re still looking for a decisive break above $1123."

He noted that "a 3-month bullish rounding (‘saucer’) bottom reversal" is taking form with potential for upside to $1160.

10:38

FTSE turns negative (again)

10:24

Emerging markets hit two-week high

Emerging markets equities advanced today hitting a two-week high on the back of the Fed's cautious tone and firmer oil prices.

The MSCI emerging markets index rose 0.65pc, lifted by gains in Russia and South Africa.

Chris Beauchamp, of IG, said: "The ongoing rally in crude is helping the mood – up days for this commodity tend to lead to gains for stock markets, but it would be unwise to declare the end of the slump in crude prices just yet."

10:18

Yen jumps on resignation of Japan's economy minister

10:12

Choppy trading in India

It was another choppy trading session for India this morning as the Fed kept interest rates unchanged and as investors churned their positions on the last day of the January derivatives contracts.

The benchmark NSE index slipped 0.4pc earlier in the session, before clawing its way back into positive territory - up 0.2pc.

10:00

UK economy expands by 0.5pc in Q4

In the final three months of 2015, the UK economy by 0.5pc - up from 0.4pc in the third quarter and in line with expectations.

Ben Brettell, of Hargreaves Lansdown, said: "Your interpretation of today’s GDP figures will depend on whether you take a ‘glass half full’ or a ‘glass half empty’ view of the UK economy.

"The bigger picture is that growth remains lacklustre, but reasonably resilient. A slowdown in emerging markets combined with increased uncertainty in global financial markets was bound to weigh on growth, but the domestic economy remains in reasonable health despite these headwinds."

Meanwhile, Connor Campbell, of SpreadEx, said: "The GDP figure helped steady early gains on the FTSE 100." However, Mr Campbell warned the gains may have quickly disappeared if the GDP figure came in below the 0.5pc mark.

Read more here

09:40

Russia's business sentiment falls into contraction

Russia's business sentiment has contracted this month due to the weakness in oil and the rouble.

The MNI Russia Business Sentiment Indicator fell to 41.3 in January from 50.0 in December, leaving it not too far off the record low of 37.1 recorded in November, according to Deutsche Börse Group, who compiles the MNI indicators data. Sentiment is now 16.1% down on the year.

MNI Russia Business Sentiment is a monthly poll of Russian business executives at companies listed on the Moscow Exchange.

Philip Uglow, Chief Economist of MNI Indicators said, “The latest survey showed business sentiment falling sharply as concerns over the weakness of the Russian rouble mounted and credit channels tightened further. It’s no secret that Russia’s fortunes are tied to the oil price and it’s difficult to see things improving unless we see a recovery in prices and stabilisation in the currency.”

09:36

Mixed scenes in Europe

09:30

Saudi stocks steady

The Saudi Arabian benchmark TASI index climbed 2.1pc this morning as oil prices remained above the $33 a-barrel mark after Russai said they should to the region about output cuts.

09:20

Brent crude stays above $33 mark

09:09

Volatility is 'set to continue'

European markets had a firmer start this morning, following Asia's torrid trading session, Andy McLevey, of Interactive Investor, said:

"Europe markets opened easier in early trading tracking the fall on Wall St as despite expressing concern at slow economic growth abroad and turbulence in financial markets the Fed statement suggests they still plan to raise interest rates this year and although a March hike seems unlikely in current market conditions it has not been ruled out.

"The volatility of late is set to continue as investors digest a raft of economic and corporate news which could set us up for a choppy session and may present some opportunities for investors hoping to snap up any bargains."

09:00

FTSE climbs above 6,000 level

08:45

European stock markets steady after shaky start

European bourses opened in negative territory before quickly turning positive after a choppy trading session in Asia and sharp losses on Wall Street.

FTSE +0.12pc

DAX +0.09pc

CAC +0.34pc

IBEX +0.49pc

08:40

Global turmoil to keep US interest rates on hold

A recap of the policy statement from the Fed which was released last night.

Economics correspondent Peter Spence writes:

The Federal Reserve has signalled that it will be cautious in raising US interest rates, as fears over the global economy and uncertainty over oil prices have jolted investor confidence since the beginning of the year.

A renewed rout in oil prices will mean that inflation will take longer to reach the central bank’s 2pc target, policymakers admitted, noting that investors believed price growth would be muted in the wake of the recent falls.

The Federal Open Market Committee (FOMC), which decides on US interest rates, said that it would not raise its rates this month, adding that it would be “closely monitoring global economic and financial developments and is assessing their implications for the labour market and inflation”.

Read more here

08:35

Another selling frenzy triggers sharp fall in Chinese stocks