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FTSE100 ends lower as miners and oil firms weigh

The FTSE100 plunged more than 100 points to 6,189 on Thursday.

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Rolls Royce and the miners hit the UK's main index

London’s blue chip stocks ended the day firmly in the minus as markets dropped dramatically this afternoon.

The arrival of the US open made an already ugly European session even worse, with the Dax losing 1.1%, or 123 points, to 10,784, while the French Cac40 dropped almost 2%, or 95 points, to 4,857.

Connor Campbell, at Spreadex, said: “A frustratingly tight-lipped Yellen failed to prevent the markets falling.”

In the US, the Dow Jones lost 1547 points to 17,539 while the broader S&P500 eased 16 points to 2,059 and the tech-heavy Nasdaq slipped 23 points to 5,044.

“There is every chance that Yellen’s lack of rate-hike commentary in her opening remarks at the ‘Monetary Policy Implementation and Transmission in the Post-Crisis Period’ conference in Washington actually made matters worse,” Campbell said.

Closer to home, with copper hitting a fresh 6 year low, and Brent Crude threatening to dip below US$45 per barrel, the FTSE100 plunged more than 100 points to 6,189.

Copper miner Glencore (LON:GLEN) was near the bottom of index, as it lost 7.6% to 95p while Shell (LON:RDSB) plunged 4.2%, or 71p, to 1,596p.

Leading the way lower was troubled jet engine maker Rolls Royce (LON:RR.) after it shocked the market with a profit warning and a gloomy forecast for 2016.

The profit warning was the fifth from the company since February last year, and shares fell 130p, or 19.5%, to 536p, a four-year low.

On a more positive note, from an investor’s perspective at least, BAE Systems (LON:BA.) managed to gain 3.8% to 455p.

It said its markets were improving and it was still winning orders, despite warning that action to extend the life of Eurofighter Typhoon aircraft would affect 2015 results.

The company also said it would cut jobs on its Typhoon jet fighter production line.

In the midcap space, Bradley Wiggins is the new face of Halfords (LON:FFD) but it wasn’t enough to mask disappoint bike sale figures.

The company is hoping to revive its bike sales, which disappointed in the first half due to bad weather and price-cutting by rivals. Shares were 8.1% lower at 395p.

Also at taking a hit was Spire Healthcare (LON:SPI), which shed 12.9% to 313p.

The company lowered its full-year revenue guidance and after a weak quarter to October. The NHS Local contract business was particularly weak, the firm said.

In the small cap world, a late gainer was technology provider Xchanging (LON:XCH) after it received a takeover approach from Computer Sciences Corp (CSC).

The bid is for 170p per share, but there can be no certainty that the deal will go ahead.

It comes after Apollo Investments, which had made a bid, pulled out of the running for the firm earlier this month.

Also higher was Kimberly Enterprises (LON:KBE) which gained an outrageous 220% to 0.4p.

The company has allowed the purchaser of the two Canadian residential development plots extra time to complete the transaction. As a result, the C$2mln deposit will become non-refundable.

Conversely, Ascent Resources (LON:AST) found itself near the bottom of the day’s biggest fallers, down 33.3% to 0.06p.

The company said it has raised £703,500 through the placing of 70.3mln shares at 1p a pop. It also agreed a drawdown of £296,500 from its Henderson facility.

Lunchtime Report

Rolls-Royce (LON:RR.) shocked the market with a profit warning and a gloomy forecast for 2016, dragging down London shares.

The FTSE 100 Index fell 64.49 points to 6232 at lunchtime after the jet engine maker said 2015 profits would be at the lower end of its guidance.

Rolls also announced a review of its dividend and said market pressures were likely to have a bigger-than-expected impact on its 2016 performance.

The profit warning was the fifth from the company since February last year. Shares in Rolls-Royce fell 137p, or 20.5%, to 530p, a four-year low.

Keith Bowman at Hargreaves Lansdown said: "For now, despite management changes and a still-sizeable order book, current consensus analyst opinion of a weak hold is likely to come under further downward pressure."

However, shares in another UK aerospace and defence company, BAE Systems (LON:BA.) rose 21.8p to 460.1p after it said its markets were improving and it was still winning orders, despite warning that action to extend the life of Eurofighter Typhoon aircraft would affect 2015 results.

On the economic front, European Central Bank President Mario Draghi opened the door to more quantitative easing next month in comments to the European Parliament.

He said: "If we were to conclude our medium-term price stability objective is at risk, we would act by using all the instruments available within our mandate to ensure an appropriate degree of monetary accommodation is maintained." The euro fell to a session-low after the comments.

Back in the markets, Burberry (LON:BRBY) was in fashion with investors after announcing higher profits despite Chinese economic turmoil. Shares rose 9p to 1344p.

Car and bike accessory retailer Halfords (LON:HFD) fell 40.4p or 9.4% to 389.6p as first-half profits fell 6% after its cycling business had a weak July and August.

Elsewhere, Starcom (LON:STAR) leapt 1.38p, or 55%, to 3.88p as the remote tracking technology group unveiled a joint venture with US-based data management tech firm Sato Global Solutions.

Norcros (LON:NXR) climbed 15.5p to 195p after the bathroom accessory supplier reported a strong first-half performance with underlying pre-tax profits up 40% to £9.4mln.

Oilex LON:OEX) fell 0.18p or 32% to 0.38p on news that a company had launched legal action against it in Australia.

Power technology manufacturer Turbo Power Systems (LON:TPS) revved up 0.05p or 16.7% to 0.35p after it moved into the black in the third quarter.

MARKET PREVIEW

London’s blue-chip stocks are expected to begin Thursday lower as the oil sector continues to be impacted by low crude prices.

Crude prices slumped around 4% late on Wednesday to their lowest levels for two months and this morning Brent changes hands at US$46 per barrel while West Texas Intermediary crude is down at US$43.20.

It comes amid renewed bearishness over the prospects for a recovery, with key market commentators believing that it will take longer for the oil market to overcome its over supply problem.

Wall Street’s oil sector slumped about 2% by Wednesday’s close, and it was a drag on the main benchmarks.

The Dow Jones closed out Wednesday 55 points, 0.3%, lower at 17,702. Both the S&P 500 and Nasdaq fell around 0.3%.

In Asia, equities were on the rise.

Hong Kong’s Hang Seng was up 455 points, about 2%, at 22,812 though Japan’s Nikkei and the Shanghai Composite were mostly flat.

Strong jobs stats in Australia provided a boost and, according to experts, reduced the pressure on the country’s central bank to stimulate the economy with looser monetary policy.

In London, the FTSE 100 is seen slightly lower on Thursday with IG Markets calling the benchmark at 6,284 to 6,289.

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