London midday: Stocks drop amid inflation, China energy worries
By Michele Maatouk
Date: Tuesday 28 Sep 2021
(Sharecast News) - London stocks were in the red by midday amid worries about inflation and Chinese power shortages, with all eyes on a testimony by Federal Reserve chair Jerome Powell later in the day.
The FTSE 100 was down 0.5% at 7,027.26.
IG market analyst Joshua Mahony said: "European markets are losing ground in early trade today, as the gains built over the course of the past week look at risk of evaporating once again. Chinese markets appear to be immune to the pessimists this week, despite much of the economic concern centring around the Asian giant.
"While the UK continues to struggle with empty petrol pumps, China has a whole host of issues that has resulted in huge power outages and widespread economic disruption. Power cuts across 20 of the Chinese states have caused a raft of downward revisions to economic growth, with Goldman Sachs joining in to predict 2021 growth of 7.9% rather than 8.2%. While each country appears to be struggling with their own mix of issues, the ongoing squeeze on energy supply has helped drive fuels sharply higher across the board.
"While many investors have spent their time diversifying towards green energy and away from fossil fuels, we are instead seeing that lack of production and persistent demand drive up the likes of crude, coal, and gasoline in recent weeks."
Later in the day, Powell is due to testify before the Senate Banking Committee, along with Treasury Secretary Janet Yellen.
In equity markets, software group Sage was knocked lower by a downgrade to 'sell' at Goldman Sachs.
Budget airline easyJet was under pressure after it said its rights issue to raise £1.2bn was 93% subscribed, leaving underwriters to find buyers for the remaining shares or pick up the tab themselves. EasyJet earlier this month unveiled plans to raise the cash via a 31-for-47 rights issue at 410p each, a deep discount of 36% on the airline's closing share price on September 8.
Water company Pennon slumped cosh despite saying it was on track to deliver a resilient financial performance in line with management expectations.
Go-Ahead shares tumbled more than 20% after it said it had lost the Southeastern rail franchise, repaid the government £25m owed under the contract and parted company with its finance chief.
Going the other way, Smiths Group rallied after it said full-year headline operating profit from continuing operations rose 14% to £372m as revenue fell 6% to £2.41bn. On an underlying basis profit rose 7% and revenue fell 2% with revenue growing in the final quarter of the year to the end of July.
Shell and BP shares gushed higher as Brent crude topped $80 a barrel for the first time in three years amid supply concerns.
Online greeting card retailer Moonpig gained after it lifted its full-year revenue guidance to between £270m and £285m from between £250m and £260m, as it hailed strong trading in the year to date.
Market Movers
FTSE 100 (UKX) 7,027.26 -0.51%
FTSE 250 (MCX) 23,234.78 -1.58%
techMARK (TASX) 4,629.99 -1.25%
FTSE 100 - Risers
Smiths Group (SMIN) 1,418.50p 4.00%
Royal Dutch Shell 'A' (RDSA) 1,642.20p 2.79%
Royal Dutch Shell 'B' (RDSB) 1,631.20p 2.27%
BP (BP.) 338.20p 2.08%
Glencore (GLEN) 340.20p 1.08%
Hargreaves Lansdown (HL.) 1,412.50p 0.78%
Unilever (ULVR) 3,996.00p 0.78%
Diageo (DGE) 3,514.50p 0.47%
Avast (AVST) 569.40p 0.25%
Mondi (MNDI) 1,832.50p 0.14%
FTSE 100 - Fallers
Sage Group (SGE) 706.80p -4.59%
Intermediate Capital Group (ICP) 2,025.00p -4.12%
Aveva Group (AVV) 3,715.00p -3.98%
Ocado Group (OCDO) 1,681.50p -3.56%
Admiral Group (ADM) 3,179.00p -3.49%
Anglo American (AAL) 2,511.00p -3.01%
Whitbread (WTB) 3,336.00p -2.97%
Taylor Wimpey (TW.) 160.90p -2.81%
JD Sports Fashion (JD.) 1,046.50p -2.79%
SEGRO (SGRO) 1,186.50p -2.79%
FTSE 250 - Risers
Capita (CPI) 54.90p 3.98%
Diversified Energy Company (DEC) 117.40p 1.56%
Investec (INVP) 315.50p 1.51%
Dr. Martens (DOCS) 387.20p 0.83%
Fidelity China Special Situations (FCSS) 315.00p 0.80%
International Public Partnerships Ltd. (INPP) 166.00p 0.73%
Templeton Emerging Markets Inv Trust (TEM) 180.80p 0.67%
Cineworld Group (CINE) 80.52p 0.62%
Harbour Energy (HBR) 375.40p 0.59%
3i Infrastructure (3IN) 316.50p 0.48%
FTSE 250 - Fallers
Darktrace (DARK) 824.50p -4.57%
PureTech Health (PRTC) 350.00p -4.50%
FirstGroup (FGP) 89.70p -4.42%
Pennon Group (PNN) 1,127.00p -4.41%
Tyman (TYMN) 419.00p -4.34%
Bridgepoint Group (Reg S) (BPT) 501.00p -4.21%
Diploma (DPLM) 2,860.00p -4.09%
Auction Technology Group (ATG) 1,288.00p -3.88%
Dechra Pharmaceuticals (DPH) 4,640.00p -3.85%
Volution Group (FAN) 492.50p -3.81%
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