LONDON (ShareCast) – – FTSE 100 at lowest level since December 18th
– Japan registers record annual deficit in 2013
– BG Group (LSE: BG.L – news) disappoints with 2014 guidance
– AT&T (NYSE: T – news) quashes Vodafone bid speculation

techMARK 2,762.54 -0.98%
FTSE 100 6,581.53 -1.23%
FTSE 250 15,547.29 -0.99%

The sell-off that began at the end of last week continued on Monday morning with the FTSE 100 shedding another one per cent, dropping to levels not seen since mid-December.

BG Group was leading the top-tier index lower this morning after disappointing investors with a gloomy outlook for 2014, while losses for heavyweights Vodafone and ARM Holdings (LSE: ARM.L – news) also ensured that markets got off to a poor start.

The FTSE 100 was down 1.2% at 6,582 in early trading; it has not closed below this level since December 18th.

London’s benchmark index has now fallen by 3.5% over the past three sessions alone as ongoing volatility in emerging-market currency markets, concerns about economic growth in China and nervousness ahead of this week’s Federal Reserve policy meeting caused investors to scale back risk appetite significantly.

In contrast, so-called ‘safe-haven’ assets such as gold and US Treasuries have in turn benefitted, while stocks in defensive sectors such as real estate and tobacco have held up relatively well.

Markets across Europe were tracking losses in Asia overnight, in part fuelled by Japan recording its 18th consecutive monthly trade deficit for December. This took the annual trade gap for 2013 to 11.5tn yen – nearly double that of 2012 and a new all-time high.

“The fact is that in the last 12 months, we haven’t really seen a decent correction in US markets, or European ones for that matter and with some doubts about valuations any nervousness on the part on investors is likely to see further volatile trading,” said Michael Hewson, Chief Market Analyst at CMC Markets.

BG Group plummets on “very disappointing” guidance

Natural gas producer BG Group has said that 2013 results will be in line with expectations, but production and profits this year will likely be lower due to “short-term issues” in Egypt and the US. The stock sank as much as 14% early on after Chief Executive Chris Finlayson labelled the group’s guidance as “very disappointing”.

Oil and gas groups Afren (LSE: AFR.L – news) and Cairn Energy (LSE: CNE.L – news) were dragged lower after the update, along with oilfield services firms AMEC (Other OTC: AMCBF – news) and Petrofac (Frankfurt: A0HF9Y – news) .

US telecoms giant AT&T has quashed talk about a takeover of Vodafone by ruling out a bid for the British mobile phone company, sending shares in the latter firmly lower this morning. Over the past few months, there had been speculation that AT&T would stage a bid for Vodafone to expand its presence in the European market.

RSA Insurance Group dropped after The Sunday Times reported it is considering scrapping its final dividend to raise £500 to fill a balance-sheet loss.

ARM Holdings was in the red after saying that it has appointed Stuart Chambers as Chairman to replace John Buchanan who is stepping down due to a medical condition.

Defensive stocks, often seen as relatively stable investments in times of market volatility, were benefitting this morning from a reduction in risk appetite. Property groups Land Securities (LSE: LAND.L – news) , British Land (LSE: BLND.L – news) and Hammerson (Other OTC: HMSNF – news) were among the better performers, along with tobacco giant Imperial.

FTSE 100 – Risers
Land Securities Group (LAND) 1,063.00p +1.24%
Shire Plc (LSE: SHP.L – news) (SHP) 2,969.00p +1.19%
Imperial Tobacco Group (IMT) 2,286.00p +1.06%
National Grid (LSE: NG.L – news) (NG.) 796.00p +0.76%
Fresnillo (Berlin: FNL.BE – news) (FRES) 797.50p +0.69%
Smith & Nephew (LSE: SN.L – news) (SN.) 889.00p +0.68%
Hammerson (HMSO) 525.50p +0.67%
Reckitt Benckiser Group (RB.) 4,724.00p +0.66%
British Land Co (BLND) 668.50p +0.60%
Coca-Cola HBC AG (CDI) (CCH) 1,706.00p +0.59%

FTSE 100 – Fallers
BG Group (BG.) 1,078.00p -14.10%
Vodafone Group (VOD) 216.25p -7.01%
Smiths Group (Other OTC: SMGKF – news) (SMIN) 1,433.00p -2.52%
Amec (Munich: AQ4.MU – news) (AMEC) 1,002.00p -2.05%
Persimmon (PSN) 1,240.00p -1.90%
ITV (Frankfurt: IJ7.F – news) (ITV (LSE: ITV.L – news) ) 190.50p -1.85%
Burberry Group (LSE: BRBY.L – news) (BRBY) 1,451.00p -1.76%
TUI Travel (LSE: TT.L – news) (TT.) 405.20p -1.75%
RSA Insurance Group (RSA) 99.95p -1.72%
Petrofac Ltd. (PFC) 1,149.00p -1.71%

FTSE 250 – Risers
Millennium & Copthorne Hotels (LSE: MLC.L – news) (MLC) 567.00p +1.52%
KCOM Group (LSE: KCOM.L – news) (KCOM) 98.75p +1.39%
Elementis (ELM) 254.10p +1.36%
NMC Health (LSE: NMC.L – news) (NMC) 465.00p +1.31%
Crest Nicholson Holdings (CRST) 359.60p +1.30%
Perform Group (Frankfurt: 8PG.F – news) (PER) 239.60p +1.10%
Genesis Emerging Markets Fund Ltd Ptg NPV (GSS) 489.80p +0.99%
Hansteen Holdings (LSE: HSTN.L – news) (HSTN) 107.50p +0.94%
Hellermanntyton Group (HTY) 314.90p +0.93%
Shaftesbury (SHB) 627.00p +0.80%

FTSE 250 – Fallers
PayPoint (PAY) 1,042.00p -3.96%
Cairn Energy (CNE) 237.70p -3.96%
Afren (Berlin: A2J.BE – news) (AFR) 145.80p -3.32%
Ferrexpo (Frankfurt: FEX.F – news) (FXPO) 157.00p -2.97%
ITE Group (LSE: ITE.L – news) (ITE) 285.60p -2.86%
Investec (INVP) 390.90p -2.79%
Regus (Frankfurt: RGV.F – news) (RGU) 207.20p -2.72%
Evraz (LSE: EVR.L – news) (EVR) 94.35p -2.53%
Supergroup (Frankfurt: 49S.F – news) (SGP) 1,487.00p -2.49%
Premier Oil (LSE: PMO.L – news) (PMO) 276.30p -2.44%