UK shares bleed in gloomy start to 2019

  • Reuters
  • Stock Market News
UK shares bleed in gloomy start to 2019
Credit: © Reuters.

(For a live blog on European stocks, type LIVE/ in an Eikon news window)

* FTSE 100 down 1.8 pct

* FTSE 250 1.1 pct lower

* Small-cap Ophir Energy skyrockets on takeover talks

Jan 2 (Reuters) - UK shares were sharply lower on Wednesday, as investors came back from New Year celebrations to more disappointing data from China that added to existing concerns about the health of the world's economy.

London's blue-chip bourse .FTSE dropped 1.8 percent and the mid-cap index .FTMC dipped 1.1 percent by 0851 GMT, with eyes on the country's manufacturing data due later in the morning.

The FTSE 100 was on track for its worst day since Dec. 6, when a sell-off swept global markets after the arrest of a top Huawei executive that had renewed worries about U.S.-China trade tensions.

Early deals pushed all sectors in the red, setting a bleak tone for 2019's first trading day after both indexes recorded their worst yearly drop since the 2008 financial crisis last year.

After ending a year marred by worries over a slowdown in global economic growth, data on Wednesday showed that as a private sector survey showed China's manufacturing activity contracted for the first time in 19 months. followed a poor official survey on factory output from the world's second-largest economy on Monday. companies with more exposure to the Asian market were the most hit with HSBC HSBA.L edging 2.1 percent lower and Standard Chartered STAN.L down 3.3 percent.

Fellow financial heavyweights Prudential PRU.L , Lloyds LLOY.L and Royal Bank of Scotland RBS.L also fell 2.8-3.9 percent.

A near 2-percent-dip in oil majors BP BP.L and Shell RDSa.L also pulled down the main index, as crude prices were lower on surging U.S. output.

Global miners were also weak with copper prices lower amid concerns over growth in top metals consumer China. Antofagasta ANTO.L , BHP BHPB.L , Anglo American AAL.L , Rio Tinto RIO.L and Glencore GLEN.L were down between 2.9 percent and 4.8 percent.

Tullow Oil TLW.L and Premier Oil PMO.L were among the biggest mid-cap fallers.

On the corporate news side, Ophir Energy OPHR.L shares outperformed the small-cap index .FTSC and soared over 34 percent after the company said it was in takeover talks with a unit of Indonesia's Medco Energi International Tbk PT MEDC.JK . and medical products maker Smith & Nephew SN.L tumbled 3 percent, with a trader citing a rating cut by brokerage JPMorgan (NYSE: JPM ).

Gambling software company Playtech PTEC.L slid 2.3 percent after it said it would pay 28 million euros under a settlement with Israeli tax authorities following an audit of its annual accounts.

Real estate investment trust Hammerson HMSO.L was 2.6 percent lower as it said its share buyback program will be paused ahead of the release of 2018 results.

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