By This Is Money Reporters
17.30 (CLOSE): London’s blue chip share index pulled back today after rallying within touching distance of its all-time closing high as concerns over China prompted a bout of profit taking.
Miners weighed heavy on the market amid jitters in China, where the yuan has fallen to a six-month low against the US dollar amid signs of weakness in the country’s housing market in January.
The FTSE 100 Index clawed back from steep early session losses, but remained 35.4 points lower at 6830.5, with the 1999 record intra-day high of 6950 slipping out of view.
Footsie stalls: The UK blue chip index was unable to make any further progress today towards its record closing high of 6,950
The top tier had come within a whisker of its 1999 closing record of 6930.2 yesterday after rising for the past seven days and climbing nearly 95% since March 2009, which was the market low in the wake of the financial crisis.
The Dow Jones Industrial Average on Wall Street managed to hold on to its recent gains in early trading, despite figures showing an unexpectedly steep decline in consumer confidence this month.
On currency markets, the pound held firm at 1.67 US dollars and 1.21 euros as Bank of England policymaker Ian McCafferty said it was ‘not unreasonable’ to expect a rate hike next spring.
The fallers board was led by silver miner Fresnillo, which fell 3 per cent or 30p to 967.5p, followed by Rio Tinto, off 97.5p to 3439p.
Engineering group GKN was another big faller in the top flight, even though it reported a 17 per cent rise in underlying profits to 578million for last year.
The car parts specialist expects further progress this year, but warned that currency translation headwinds may also have an impact.
Shares were off 4.2p at 410.7p, although much of the decline was due to profit-taking after a strong run for the stock as vehicle production improves.
Vodafone also slipped 2 per cent or 5.4p to 247p as shares in the mobile phone giant began to settle down after the recent sale of its stake in Verizon Wireless.
Housebuilder Persimmon, which has been another of the market’s strong performers in recent months, fell back after reporting a 49 per cent rise in profits.
It aims to speed up payments under a planned 1.9billion programme to return cash to investors, but this was not enough to prevent the stock slipping 8p to 1463p.
In other corporate results, bookmaker Ladbrokes rose 3.6p to 154.6p as it reported a sharp fall in profits for last year and said the first half of this year will also be impacted by ongoing efforts to overhaul its digital offer.
The share price performance suggests that investors are prepared to give chief executive Richard Glynn until later this year to deliver on his strategy.
The session also saw the start of conditional dealings in newsagent McColl’s after its shares were priced at 190p, giving it a market value of around 200million. The stock fell back 5.5p to 184.5p ahead of full trading on Friday.
The biggest FTSE 100 risers were CRH up 104p to 1788p, RSA Insurance ahead 3.5p to 101p, Sports Direct International 15p higher at 808.5p and William Hill 5.9p stronger at 377.3p.
The biggest FTSE 100 fallers were Fresnillo down 30p to 967.5p, Rio Tinto off 97.5p to 3439p, Anglo American 33p weaker at 1500.5p and Vodafone 5.4p lower at 247p.
15.40: The Footsie stayed weak in late afternoon trade, dragged back from yesterday’s 14 year closing peak by big falls from heavyweight miners on China growth worries, with US stocks also in retreat early on after hitting highs.
With less than an hour of trading to go, the FTSE 100 index was down 66.1 points at 6,799.8, close to session lows, falling back after a recent assault on its all-time closing peak of 6.950.6.
In early deals in New York, the Dow Jones Industrial Average fell 37.8 points to 16,168.9 as investors took profits following strong gains in the previous session after a batch of weak data raised fresh concerns over the pace of economic recovery.
Global retreat Stock markets fell back today as investors took profits on recent gains which has sent then up towards record highs
US consumer confidence index fell to 78.1 in February, down from a downwardly revised 79.4 in January, the Conference Board said. Economists had expected a reading of 80.1 for this month.
And US home prices ticked down 0.1 per cent in December, declining for a second month, according to S&P/Case-Shiller’s composite index.
On currency markets, the pound rose for a second day against the dollar after an industry report showed UK mortgage approvals climbed to a six-year high in January, adding to signs the UK recovery is gaining momentum.
The British Bankers’ Association said the boom in mortgage lending has continued into 2014 to reach levels not seen before the financial crisis with 49,972 approvals for property purchase in January, compared to 47,086 in December.
Sterling also found support after Bank of England policy maker Ian McCafferty said in an interview with Reuters that market expectations that the Bank will start to raise interest rates in the spring of 2015 are ‘not unreasonable’.
And fellow BoE policymaker Martin Weale said in the Evening Standard newspaper that quicker wage growth will lead to an earlier increase in interest rates.
But the major focus on the foreign exchanges was China’s yuan which fell to a six-month low against the US dollar amid signs of weakness in the country’s housing market in January which raised concerns about growth in the country.
Mining stocks were most impacted by the China worries, with the country the world’s top consumer of metals, with the FTSE 100 fallers board led by Rio Tinto which dropped 139.0p to 3,397.5p.
Among those few blue chips bucking the dull market trend, retailers got a boost from news that sales grew at the fastest pace since June 2012 in the first part of February, according to a survey by the Confederation of British Industry.
After a slow beginning to the year, the CBI distributive trades survey’s sales balance rose to +37, its highest level since June 2012, from +14 in January.
Food retailer Sainsbury was in demand, up 1.2p to 349.9p, while Britain’s biggest retailer Tesco added 1.8p at 335.2p as it delivered a strategy presentation this afternoon.
Tesco will it will continue to invest in its core UK business but will significantly reduce growth in new stores as it cuts its capital spending back to no more than 2.5billion for the next three years.
Electricals retailer Dixons was the top FTSE 100 gainer, however, gaining another 0.8p at 51.1 as investors continued to welcome yesterday’s news that the firm is in merger discussions with mobile phones stores group Carphone Warehouse.
12.55: The biggest one-day slide by the mining sector in six months knocked the Footsie lower today as the recent run of gains which have lifted the blue chips to a 14-year high and within sight of all-time records were brought to an end.
By lunchtime, the FTSE 100 Index was 63.7 points lower at 6,802.1 as talk of an assault on the 1999 record intra-day high of 6,950 became a distant memory.
The move to the sidelines was driven by jitters in China, where the yuan has fallen to a six-month low against the US dollar amid signs of weakness in the country’s housing market in January.
Miners drag: Big falls by the heavyweight mining sector weighed on the Footsie today
Miners were most impacted by the China worries, with the country the world’s top consumer of metals, albeit with the sector having risen for the past seven days and having climbed nearly 95 per cent since March 2009, which was the market low in the wake of the financial crisis.
The fallers board was led by Anglo American, which dropped 51p to 1484p, while Rio Tinto was off 99p to 3437.5p.
Daniel McCormack, a strategist at Macquarie said: ‘China is absolutely crucial to marginal demand for industrial metals and there is no doubt that recent macro-economic concerns in China are playing a role in the sector’s underperformance.’
‘But I would probably use the recent pullback as an opportunity to accumulate mining stocks. The earnings momentum has turned, the sector is cheap and is pricing in a weakness in commodity prices,’ he added.
Engineering group GKN was another big blue chip faller as although it posted a rise in annual profits and forecast continued growth this year, the car parts specialist unnerved some investors by warning on the possible effects of adverse currency movements.
GKN shares were off 11.25p at 403.65p, although much of the decline was due to profit-taking after a recent strong run for the stock driven by improving vehicle production numbers.
Housebuilder Persimmon, which has been another of the market’s strong performers in recent months, also fell back after reporting a 49 per cent rise in profits.
The firm said it aims to speed up payments under a planned 1.9billion programme to return cash to investors but this was not enough to prevent the stock slipping 12p to 1,454p.
In other corporate results, bookmaker Ladbrokes rallied from earlier falls to rise 0.5p to 151.5p as it reported a sharp fall in profits for last year and said the first half of this year will also be impacted by ongoing efforts to overhaul its digital offer.
The share price performance suggests that investors are prepared to give chief executive Richard Glynn until later this year to deliver on his strategy.
The session also saw the start of conditional dealings in newsagent McColl’s after its shares were priced at 190p, giving it a market value of around 200million.
McColl’s shares fell back 7p to 183p ahead of full trading this Friday.
10.20: London shares stayed weak in mid morning trade as investors opted to lock in profits today following a strong run in which the FTSE 100 Index has soared to its best closing level in 14 years.
The UK blue chip was down 42.0 points at 6,823.8 despite another positive session on Wall Street as optimism over the US economic recovery pushed the Dow Jones Industrial Average more than 0.6 per cent higher.
Hopes that the top flight will close in on its record high of 6,950 were dashed as London investors decided it was time to take cash off the table.
Joao Monteiro, analyst at Monex Capital Markets said: ‘Wall Street may have finished last night on an upbeat note last night with the S&P 500 finding its way to fresh highs during the session, but the enthusiasm certainly hasn’t carried across into Asia.
‘Shanghai recorded its worst day in seven months with the composite index dropping by over 2 per cent as fears are heightened that a collapse in the property bubble is getting ever closer.
‘It’s been property development companies that have borne the brunt of the sell-off, but the real fear is that any slowdown in the property market will be felt across the board with consumption of everything from small electronics to cars likely to suffer.’
Falls by heavyweight mining stocks was the main drag on the blue chips, with copper miner Rio Tinto the biggest casualty down 116.0p at 3,420.5.5p.
The sector suffered again after media reports on Monday in top metals consumer China stoked fears that local banks had begun tightening loans to property developers and some other sectors such as steel, cement and construction.
Weakness in market heavyweight Vodafone also had an impact on the FTSE 100, with the mobile phones giant shedding 5.4p to 246.9p as the stock began to settle down after the recent sale of its stake in Verizon Wireless in advance of the cash and shares return of the proceeds to investors, the largest in corporate history.
Engineering group GKN was a big faller too, despite reporting a 17 per cent rise in underlying profits to 578million for last year.
The car parts specialist expects further progress this year but warned that currency translation headwinds may have an impact. GKN shares were off 9.1p at 405.8p.
In other corporate results, bookmaker Ladbrokes fell 2.4p to 148.6p as it reported a sharp fall in profits for last year and said the first half of this year will also be impacted by ongoing efforts to overhaul its digital offer.
08.30: The FTSE 100 has opened down 23.1 points at 6,842.8, taking a breather after a three-week rally that has pushed it close to an all-time high.
The overall mood of investors remains bullish as companies deliver positive results and a number of US and European equity indices reach key levels.
The Footsie closed up 27.80 points at 6,865.86 yesterday, rising for its seventh straight session to just 1.2 per cent below its December 1999 record level of 6,950.60.
Market watch: Overall mood of investors remains bullish as companies deliver positive results and a number of US and European equity indices reach key levels
Michael Hewson, chief market analyst at CMC Markets, said: ‘It seems yesterday’s move higher in the US to a new record high on the S&P500 was the catalyst that propelled the FTSE100 to its highest close since December 1999.
‘It also briefly saw the London market push briefly above its previous intraday high seen in May last year at 6,875, and with it has raised the prospect of the possibility that we could be set to close in on the previous all-time high of 6,950.
‘It is becoming increasingly hard to imagine what could prevent a test of the all-time highs given the current resilience off all markets to continued disappointing economic data, concerns surrounding the recovery of the Chinese economy, emerging markets unrest, as well as mixed earnings data.
Stocks to watch today include:
GKN: The car and plane parts maker reported a 17 per cent rise in annual profit, beating analyst expectations as strong demand in its automotive unit offset sluggish growth in military markets.
ASHMORE: The emerging markets-focused fund management group reported net outflows of assets.
COBHAM : Defence supplier Cobham said it had voluntarily contacted the US Department of Justice to inform it of an initial internal investigation into potentially irregular sales practices concerning sales to Asia of products made by a Cobham unit.
CRODA: The specialty chemical maker said it expected currency translation to have an adverse impact on profit growth in 2014.
LADBROKES: The gambling company reported a 32.9 per cent fall in 2013 profits.
PERSIMMON: The housebuilder posted a rise in annual profits.
PROVIDENT FINANCIAL: The sub-prime lender boosted its 2013 pre-tax profit before exceptional items by 9.9 per cent to 196.1million pounds, helped by strong growth from Vanquis Bank.
ST JAMES’S PLACE: The investment manager is close to making an acquisition in Asia as part of an overseas expansion drive aimed at establishing a new client base of expatriates.
DRAX GROUP: Brussels has initiated a preliminary probe into the possible breach of state aid rules by the UK in guaranteeing a 75million loan to Drax Group, operator of Britain’s biggest power station, the Financial Times reported.
BHP BILLITON: The top global miner said it would suspend production at its Yarrie iron ore mine indefinitely as part of its drive to cut costs.
BP: The firm began the planned overhaul of a 65,000 barrel per day (bpd) gasoline-producing fluidic catalytic cracking unit at its 405,000 bpd refinery in Whiting, Indiana, according to a source familiar with operations at the refinery.
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