Britain's FTSE tumbles on strong pound; Fresnillo, Centrica lead fallers

  • Reuters
  • Stock Market News
Britain's FTSE tumbles on strong pound; Fresnillo, Centrica lead fallers
Credit: © Reuters.

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* FTSE 100 down 1.4 pct; FTSE 250 down 0.8 pct

* Vodafone , DCC, Evraz , others go ex-div

LONDON, Nov 22 (Reuters) - UK shares fell sharply on Thursday as sterling rallied after the European Commision and Britain agreed on a draft text for future EU-UK ties following their divorce, with Centrica , Fresnillo and other mining stocks leading the decline.

Some of the biggest fallers - Vodafone VOD.L , Imperial Brands IMB.L , DCC DCC.L , National Grid NG.L and Evraz EVRE.L - went ex-dividend, taking around 9.8 points off the index. FTSE 100 .FTSE was down 1.4 percent at 1028 GMT, handing back the previous session's gains and underperforming its euro zone counterparts as the pound surged on positive news from Brussels midmorning. FTSE 250 .FTMC was down 0.8 percent. With U.S. markets closed, volumes were lower than usual.

"The drop has taken some of the shine off yesterday's surge in risk assets, although it will be worth watching to see if any buyers follow up on this morning's weakness and help to set us up for a better end to the month and a more optimistic start to December," said IG chief market analyst Chris Beauchamp.

Energy, mining and consumer staples accounted for the majority of the losses.

Fresnillo FRES.L was the biggest faller, down 10.5 percent, after Morgan Stanley (NYSE: MS ) downgraded the stock on fears the company will find doing business in Mexico much harder following the passage of recent legislation.

Utilities were also in focus after earnings from Centrica CNA.L and Severn Trent SVT.L .

Centrica hit March lows and was on track for its worst day in a year after the energy supplier reported losing customers, lower nuclear power generation and a fall in output at its oil and gas division. Severn Trent dropped 1.7 percent after its results.

Among the mid-caps, Rotork ROR.L slumped more than 7 percent to the bottom of the index as investors focused on the drop in its third-quarter order book, rather than the in-line set of results. Investec analysts say the shares look overvalued based on their earnings outlook.

Hill & Smith rose 3.5 percent after confirming its full-year earnings outlook, with third-quarter organic underlying revenue growth of 5 percent and activity levels healthy after the tough first quarter.

"The Q3 update is reassuringly inline, confirming that the company has been performing well since the weather-related issues in Q1," said Peel Hunt analysts.

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