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BG and Barclays weigh on FTSE 100

BG and Barclays weigh on FTSE 100

16.35: Small morning losses on the FTSE 100 had swollen to a 50 point drop as the day’s trade drew to a close, with BG Group (BG.L) dragging the index lower.

Shares in BG fell as much as 20% at one point as investors fled after the gas producer warned of poor production in the coming year and sold off profitable assets as part of its debt-reduction programme. Later in the afternoon they had pulled back slightly, but still traded down nearly 14% to £11.45.

Barclays (BARC.L) was also among the blue chip losers, dropping 4.4% to 227p as it was revealed the bank is embroiled in two more regulatory probes in the US and as payment protection insurance (PPI) claims took a toll on profits in the three months to the end of September.

Man Group (EMG.L), the hedge fund whose shares regularly feature among the biggest FTSE movers, was down 4% to 78p.

The FTSE took a turn for the worse, down 0.8% to 5,803, after a report showed that unemployment in the eurozone hit a new high of 18.49 million in September.

Having been closed for two days because of hurricane Sandy, US markets opened lower. The S&P 500 dropped 0.3% to 1,408.

Barclays sinks on flat FTSE 100

9.18: Beleaguered bank Barclays sank on the FTSE 100 in Wednesday morning trade as it was revealed the bank is embroiled in two more regulatory probes in the US and as payment protection insurance (PPI) claims took a toll on profits in the three months to the end of September.

The shares fell 10.4p, or 4.3%, to 228p as pre-tax profits came in at £1.73 billion in the third quarter. Profits are down 23% year-on-year once a £700 million charge for mis-selling PPI is included.

The bank also revealed the US Department of Justice is investigating its relationships with third parties, which may be in breach of the US Foreign Corrupt Practices Act, and it is being queried about power trading in the western US.

Markets were virtually flat, with the FTSE 100 shedding 0.04%, or two points, to 5,848 and the Mid-250 index rising 0.19%, or 23 points, to 11,977.

European employment data will be released later this morning, and is expected to show an increase to a record high of 11.5% unemployment in September.

Markets are expected to reopen on Wall Street later today as authorities start to clean up New York after Hurricane Sandy pummelled the city, causing tens of billions of dollars worth of damage and leaving millions without electricity.

Gas producer BG Group tumbled to the bottom of the FTSE 100, down 92.5p, or 6.9%, to £12.37 despite announcing a 16% increase in earnings in the third quarter. It also announced that it has struck a deal with China National Offshore Oil Corporation to sell interests in its Queensland Curtis LNG project for $1.93 billion (£1.2 billion). 

On the FTSE 100 high-street retailer Next (NXT.L) shed 51p, or 1.4%, to £35.54 as quiet trade in August was compensated by stronger sales in September and October. Third-quarter sales grew 2.7% compared with 4.5% in the first half; however, the group is on target to reach full-year profits forecast of £590 million to £620 million.

Wealth manager St James’s Place (SJP.L) took on 17.6p, or 4.6%, to 397.3p as fund inflows increased, with an 8% rise in new business in the third quarter. The group has gained market share from rivals who are struggling to keep charges under control.

Financial group Standard Life (SL.L) added 2.3p, or 0.81%, to 288p despite sales falling 9% in the first nine months of the year. However, inflows to its savings business and a strong performance at Standard Life Investments pushed up assets under management to record levels at £211.9 billion, up from £198.4 billion at the start of the year.

Broadcaster ITV (ITV.L) and safety inspection business Intertek Group (ITRK.L) also dropped on the index as they both went ex-dividend.

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