London open: Stocks slump as commodities weaken

4th Aug 2015 09:23

(ShareCast News) - London equities were dragged into negative territory by natural resource related stocks as commodity prices weakened.A measure of mining shares were in the red, including Rio Tinto, Anglo American and Fresnillo, as gold and silver prices declined on the Comex.The mining sector continued to reel on worse-than-expected Chinese manufacturing data on Monday, adding to concerns about the slowdown in the world's second largest economy.Chinese stocks, however, recovered on Tuesday after the Shanghai and Shenzhen stock exchanges announced revised rules on short selling to curb volatility. The new rules will mean short sellers must wait at least one day to cover their positions and pay back loans used to buy shares.Closer to home, a report from Nationwide ahead of the opening bell showed UK house prices rose 3.5% year-on-year in July, as expected, accelerating from the previous month's 3.3% gain. Compared to a month ago prices increased 0.4% in July, in line with forecasts, following a 0.2% drop in June."We currently expect house prices to rise by 6% in 2015 and then by a further 5% in 2016," said Howard Archer, chief economist at IHS Global Insight. "We see the risks to these forecasts being primarily to the upside despite the still relatively muted Nationwide data."However, Archer said the housing market activity and prices are expected to be constrained by more stretched house prices to earnings ratios, tighter checking of prospective mortgage borrowers by lenders and the likelihood that interest rates will soon start rising gradually.Looking to the day ahead, a report on UK construction activity will be released at 0930 BST and data on US factory orders will follow at 1500 BST.In company news, Travis Perkins was a top faller in morning trade despite robust first-half results in the face of continued wobbles in the plumbing and heating market, with sales growth accelerating in the second quarter and the dividend lifted 20%.Meggitt gained after posting a 6% rise in underlying first-half pre-tax profit as stronger-than-expected military revenue offset challenging conditions in the energy market, and announced two contract wins.Smith Group advanced after it emerged that US activist hedge fund ValueAct is a shareholder. According to the Financial Times, ValueAct's stake in Smiths is below the 5% required for disclosure to the London Stock Exchange.ARM Holdings edged lower after announcing a reshuffling of the board with Stephen Pusey and Lawton Fitt appointed as independent non-executive directors.Direct Line Insurance Group climbed as reported a rise in pre-tax profit for the first half and raised its interim dividend. Market MoverstechMARK 3,199.22 -0.14%FTSE 100 6,656.61 -0.48%FTSE 250 17,645.84 -0.14%FTSE 100 - RisersSmiths Group (SMIN) 1,217.00p +5.92%Meggitt (MGGT) 486.10p +4.72%Direct Line Insurance Group (DLG) 372.60p +1.80%RSA Insurance Group (RSA) 527.50p +0.86%Admiral Group (ADM) 1,499.00p +0.60%British American Tobacco (BATS) 3,798.50p +0.36%BHP Billiton (BLT) 1,141.00p +0.35%Anglo American (AAL) 781.10p +0.27%Aviva (AV.) 520.00p +0.19%GKN (GKN) 316.70p +0.13%FTSE 100 - FallersTravis Perkins (TPK) 2,185.00p -3.32%Coca-Cola HBC AG (CDI) (CCH) 1,308.00p -2.68%Standard Life (SL.) 442.70p -2.60%International Consolidated Airlines Group SA (CDI) (IAG) 540.50p -1.91%Intertek Group (ITRK) 2,674.00p -1.73%ARM Holdings (ARM) 979.50p -1.41%Ashtead Group (AHT) 951.50p -1.40%BP (BP.) 386.05p -1.38%Barclays (BARC) 284.35p -1.34%3i Group (III) 542.50p -1.27%FTSE 250 - RisersRotork (ROR) 225.50p +4.40%Fidelity China Special Situations (FCSS) 135.30p +2.04%Just Eat (JE.) 445.50p +1.76%Redefine International (RDI) 51.60p +1.57%Vedanta Resources (VED) 387.60p +1.36%Auto Trader Group (AUTO) 349.20p +1.33%Essentra (ESNT) 939.50p +1.29%Jimmy Choo (CHOO) 172.30p +1.23%Riverstone Energy Limited (RSE) 960.00p +1.16%Daejan Holdings (DJAN) 6,525.00p +1.16%FTSE 250 - FallersHunting (HTG) 489.40p -1.85%Diploma (DPLM) 715.50p -1.85%Bank of Georgia Holdings (BGEO) 1,961.00p -1.80%Serco Group (SRP) 124.70p -1.73%SIG (SHI) 206.00p -1.67%Aveva Group (AVV) 2,126.00p -1.62%Tullow Oil (TLW) 240.10p -1.60%Foxtons Group (FOXT) 248.00p -1.59%Evraz (EVR) 99.10p -1.59%Aldermore Group (ALD) 254.00p -1.44%FTSE TechMARK - RisersDialight (DIA) 553.50p +1.56%Consort Medical (CSRT) 930.00p +1.42%E2V Technologies (E2V) 227.00p +1.11%Sepura (SEPU) 156.00p +0.65%KCOM Group (KCOM) 95.25p +0.53%XP Power Ltd. (DI) (XPP) 1,675.00p +0.45%IShares Euro Gov Bond 7-10YR UCITS ETF (IEGM) € 201.94 +0.24%Oxford Instruments (OXIG) 922.00p +0.22%FTSE TechMARK - FallersSDL (SDL) 386.25p -3.56%Oxford Biomedica (OXB) 8.76p -2.23%Spirent Communications (SPT) 93.75p -0.79%Innovation Group (TIG) 32.50p -0.76%NCC Group (NCC) 233.75p -0.11%