MARKET REPORT
MORE than £27 bn was wiped off the value of blue-chip stocks yesterday as investors remained spooked by the simmering tensions between the US and North Korea.
The FTSE 100 Index closed down 1.4%, or 108.12 points to 7,389.94, with Pyongyang unveiling plans to launch a volley of missiles towards the US Pacific territory of Guam, an America military hub. The statement said the plan could be sent to leader Kim Jong Un for approval within a week.
The top-flight also sank lower as a number of stocks went ex-dividend, a process where new buyers no longer qualify for the latest dividend payment.
It was the biggest daily fall on the FTSE 100 since April 18 this year when the market lost 180 points. Across Europe, Gemany’s Dax was off 1.2% and the Cac 40 in France dropped by 0.6%.
On the currency markets, the pound edged 0.2% lower versus the US dollar at 1.298, as traders responded to another tranche of lacklustre data from the UK economy.
Britain’s trade deficit widened in June as sterling’s slump since the Brexit vote failed to provide a boost for exports, according to figures from the Office for National Statistics (ONS).
The UK’s deficit in goods and services, the gap between exports and imports, climbed by £2bn to £4.6bn between May and June after a drop in exported goods.
Separate ONS data showed that a pick-up in Britain’s industrial output in June was marred by a slump in car production, while construction also fell. Sterling was also down 0.1% versus the euro at 1.104.
In oil, Brent crude was dragged 0.5% lower at 52.46 US dollars a barrel despite Opec forecasting increased demand for oil next year.
Focusing on UK stocks, BT and Lloyds Banking Group were among the biggest fallers after going ex-dividend. BT dropped more than 4%, or 14.4p to 298.9p, while Lloyds fell 2.1p to 64.83p.
Prudential also took a downward turn after announcing plans to merge its M&G asset management arm with its UK life and pensions business – a move likely to trigger job losses. Shares were off 15.5p to 1,826p.
The biggest risers on the FTSE 100 Index were CocaCola HBC up 219p to 2,592p, WorldPay up 19p to 407.5p, Randgold Resources up 95p to 7,475p and WPP up 19p to 1,581p.
The biggest fallers were BT Group down 14.4p to 298.9p, Rio Tinto down 119.5p to 3,479.5p, Lloyds Banking Group down 2.1p to 64.83p and Intercontinental Hotels Group down 128p to 4,036p.