London open: Stocks drop amid Sino-US worries; miners under the cosh
London stocks fell sharply in early trade on Monday, taking their cue from heavy losses in Asia amid worries about escalating Sino-US trade relations.
At 0830 BST, the FTSE 100 was 1% weaker at 7,333.19, while the pound was down 0.4% against the dollar at 1.2111 and 0.5% lower versus the euro at 1.0894 amid ongoing concerns about a no-deal Brexit.
Oanda analyst Craig Erlam said London markets were "continuing the slump from Asia overnight as traders fret about what the US dollar rising above 7 against the Chinese yuan means for the economy and trade war.
"This level has been protected for a long time by the Chinese who fear the consequences of rapid capital outflows and have spent large amounts of reserves to keep the currency just below. It seems they're now prepared to relax this policy after the US ramped up the trade war last week, slapping a 10% tariff on $300 billion of imports from the start of next month.
"This unintended consequence of the new tariffs will undoubtedly infuriate Trump who has accused China of currency manipulation in the past, even though this is effectively a case of them manipulating it less as market pressures grow.
"The timing of the move will spark speculation that this is being done intentionally as a counter-measure against US tariffs, which could cool relations further and make negotiations that much tougher. We now await Trump's response which I imagine will come via Twitter shortly."
In equity markets, miners were the biggest drag, with Antofagasta, Rio Tinto, Glencore and Anglo American all lower as copper and iron ore prices slumped. Iron ore company Ferrexpo also suffered heavy losses.
HSBC lost ground as it said chief executive John Flint had stepped down as the bank believed a change was needed “to meet the challenges” it faces. HSBC said Flint had resigned "by mutual agreement with the board" as it revealed first-half pre-tax profit rose 15.9% and a further buyback of $1bn (£823m).Pre-tax profits were $12.41bn, up from $10.71bn a year ago.
BBA Aviation was also in the red after it posted a small drop in interim pre-tax profit despite a solid performance in its signature division.
Precious metals miner Fresnillo bucked the trend, with gold prices on the rise as investors opted for somewhere safe to park their cash.
Market Movers
FTSE 100 (UKX) 7,333.19 -1.00%
FTSE 250 (MCX) 19,076.42 -0.92%
techMARK (TASX) 3,809.23 -0.89%
FTSE 100 - Risers
Fresnillo (FRES) 626.20p 2.49%
Diageo (DGE) 3,449.50p 0.43%
Reckitt Benckiser Group (RB.) 6,158.00p 0.29%
Relx plc (REL) 1,923.50p 0.05%
Unilever (ULVR) 4,933.00p -0.13%
Royal Bank of Scotland Group (RBS) 202.60p -0.15%
HSBC Holdings (HSBA) 644.50p -0.25%
London Stock Exchange Group (LSE) 6,818.00p -0.26%
SSE (SSE) 1,096.00p -0.27%
Informa (INF) 847.80p -0.28%
FTSE 100 - Fallers
Antofagasta (ANTO) 815.60p -4.52%
Rio Tinto (RIO) 4,241.50p -4.02%
Ocado Group (OCDO) 1,164.80p -3.62%
Micro Focus International (MCRO) 1,677.60p -3.48%
Marks & Spencer Group (MKS) 195.55p -3.06%
Anglo American (AAL) 1,847.40p -2.93%
Ashtead Group (AHT) 2,130.00p -2.91%
BHP Group (BHP) 1,802.00p -2.85%
Mondi (MNDI) 1,590.00p -2.79%
Smith (DS) (SMDS) 330.60p -2.78%
FTSE 250 - Risers
Vivo Energy (VVO) 120.08p 4.24%
Rank Group (RNK) 154.60p 4.17%
Daejan Holdings (DJAN) 5,670.00p 2.90%
Shaftesbury (SHB) 790.00p 2.33%
PayPoint (PAY) 982.00p 2.32%
4Imprint Group (FOUR) 2,950.00p 2.08%
Plus500 Ltd (DI) (PLUS) 591.60p 1.67%
Sirius Minerals (SXX) 15.19p 1.50%
HarbourVest Global Private Equity Limited A Shs (HVPE) 1,697.30p 1.03%
Intu Properties (INTU) 43.16p 0.91%
FTSE 250 - Fallers
Woodford Patient Capital Trust (WPCT) 42.62p -6.62%
Ferrexpo (FXPO) 232.00p -5.91%
BBA Aviation (BBA) 298.80p -5.02%
Future (FUTR) 1,058.80p -4.78%
Weir Group (WEIR) 1,329.50p -4.25%
Petrofac Ltd. (PFC) 383.34p -4.04%
Premier Oil (PMO) 72.23p -3.40%
Kaz Minerals (KAZ) 487.60p -3.32%
Wood Group (John) (WG.) 470.80p -3.32%
Spectris (SXS) 2,399.55p -2.85%