London stocks reversed earlier gains to close lower on Wednesday as US equities retreated on the back of weak retail sales and growing political uncertainty, although a strong showing from Prudential and heavily-weighted miners kept losses to a minimum.
The FTSE 100 closed down 0.1% to 7,132.69, while the pound was up 0.1% against the euro at 1.1285 and flat versus the dollar at 1.3958.
Stocks had been marching higher until equities on Wall Street turned lower following the release of disappointing retail sales figures. According to data from the US Census Bureau, retail sales were down 0.1% month-on-month in February versus expectations of a 0.3% increase, marking the third consecutive month of decline. Excluding autos, retail sales were up 0.2%, but this was short of consensus forecasts for a 0.4% increase, with a mixed performance across subsectors.
Market analysts also suggested that the move lower across the pond was down to ongoing jitters about the chaos of Donald Trump's White House, following the sacking of Secretary of State Rex Tillerson on Tuesday, which came just days after the departure of Trump's chief economic adviser Gary Cohn.
In UK corporate news, Morrisons dropped even as it announced a special dividend on top of the supermarket group's annual payout after another year of sales and profits growth.
Ocado was weaker as Walmart revealed that it is expanding its online grocery delivery service from six US metro areas to more than 100 in total by the end of the year, while Cathedral City maker Dairy Crest was hit by a note from Peel Hunt.
Chris Beauchamp at IG said: “Ocado had been riding high of late thanks to hopes of a deal in the US but it looks like this has been dashed as the US giant Walmart looks to expand its offering directly, rather than using the UK firm as a partner.
“Short positions got cleaned out months ago when the first international deals came through, but some of the cynicism is returning, with shorters adding to their bearish position on the stock.”
InterContinental Hotels fell after saying it has agreed to buy a majority stake in Regent Hotels and Resorts for $39m in cash, with the right to acquire the remaining 49% interest in a phased manner from 2026.
Overall losses were kept to a minimum, however, thanks in part to solid gains from life insurer Prudential, as investors welcomed its plans to split off its UK and Europe business and a rise in annual profit driven by surging sales at its Asian business.
Heavily-weighted miners also lent support, with Anglo American, Antofagasta and BHP Billiton all higher after better-than-expected industrial production out of China lifted metals prices and following upgrades at Goldman Sachs.
Funeral and funeral-related services provider Dignity surged following its full-year numbers as it reassured investors after a profit warning in January, with Panmure Gordon saying there could be “substantial” consensus upgrades on the horizon.
Infrastructure group Balfour Beatty was on the front foot after reporting a big rise in annual profit while Hikma Pharmaceuticals advanced after its full-year adjusted operating profit and earnings beat expectations.
Cairn Energy was also in the black a day after its results, as Morgan Stanley reiterated its 'overweight' stance on the stock following the material selloff post the earnings presentation.
FTSE 100 (UKX) 7,132.69 -0.09%
FTSE 250 (MCX) 19,833.73 -0.15%
techMARK (TASX) 3,329.08 -0.30%
FTSE 100 – Risers
Prudential (PRU) 1,918.00p 5.07%
Antofagasta (ANTO) 946.20p 3.46%
Anglo American (AAL) 1,789.40p 3.34%
Glencore (GLEN) 383.55p 1.82%
GKN (GKN) 437.30p 1.70%
British American Tobacco (BATS) 4,234.00p 1.63%
London Stock Exchange Group (LSE) 3,966.00p 1.56%
Paddy Power Betfair (PPB) 7,795.00p 1.50%
United Utilities Group (UU.) 700.80p 1.33%
CRH (CRH) 2,466.00p 1.23%
FTSE 100 – Fallers
Morrison (Wm) Supermarkets (MRW) 215.30p -4.86%
BP (BP.) 464.75p -1.95%
Old Mutual (OML) 250.90p -1.88%
Mediclinic International (MDC) 598.20p -1.81%
Kingfisher (KGF) 347.90p -1.75%
Standard Chartered (STAN) 763.90p -1.69%
Just Eat (JE.) 763.20p -1.52%
Whitbread (WTB) 3,826.00p -1.29%
Sainsbury (J) (SBRY) 238.60p -1.24%
Croda International (CRDA) 4,527.00p -1.16%
FTSE 250 – Risers
Dignity (DTY) 981.50p 15.06%
Galliford Try (GFRD) 1,033.00p 6.99%
Hikma Pharmaceuticals (HIK) 929.00p 6.49%
Cairn Energy (CNE) 201.40p 4.03%
Capita (CPI) 165.35p 3.38%
Inmarsat (ISAT) 399.70p 3.36%
Kaz Minerals (KAZ) 933.60p 3.25%
Ferrexpo (FXPO) 306.60p 2.96%
John Laing Infrastructure Fund Ltd (JLIF) 114.80p 2.68%
Ascential (ASCL) 414.80p 2.67%
FTSE 250 – Fallers
Dairy Crest Group (DCG) 510.00p -7.02%
Just Group (JUST) 135.00p -5.46%
Euromoney Institutional Investor (ERM) 1,258.00p -4.70%
Petrofac Ltd. (PFC) 477.80p -4.11%
Tullow Oil (TLW) 180.00p -3.41%
Ocado Group (OCDO) 578.20p -3.15%
Saga (SAGA) 113.20p -2.92%
TalkTalk Telecom Group (TALK) 105.60p -2.67%
Convatec Group (CTEC) 196.90p -2.52%
McCarthy & Stone (MCS) 143.30p -2.52%