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London open: Stocks in the red as OPEC deal hopes fade
Stocks in London fell in early trade as investors looked to a meeting of the Organization of the Petroleum Exporting Countries in Vienna on Wednesday amid doubts about whether the cartel will agree a deal to cut output.
At 0825 GMT, the FTSE 100 was down 0.7% to 6,794.53. Meanwhile, oil prices were under pressure as Saudi Arabia said it won’t meet with non-OPEC Russia ahead of the OPEC summit in Vienna as originally planned.
Saudi Arabia, which is the world’s largest oil producer, said on Friday that it wouldn’t attend the meeting unless there was “a clear decision from OPEC” on production cuts.
West Texas Intermediate was down 1% to $45.59 a barrel while Brent crude was 1% weaker at $46.78.
Spreadex‘s Connor Campbell said: “With little on the economic agenda this Monday investors looked to the rest of the week for guidance this morning.
“Chief of these more macro concerns was OPEC’s meeting on Wednesday, the prospect of which has caused another near 1% slide from Brent Crude. That is because hopes for an output deal have once again sunk after Saudi Arabia pulled out of a meeting with non-OPEC members, with the country also suggesting that since it expects ‘demand to recover in 2017’ a cut may not be needed.”
Royal Dutch Shell was down 1.9% and BP shares dropped 1.4%.
Elsewhere, JD Sports Fashion rallied as it acquired outdoor pursuits retail chain Go Outdoors for £128.3m from owners that include private equity group 3i.
Antofagasta edged higher after agreeing to sell the Michilla mine to Chilean mining group Haldeman Mining Company for up to $52m following the closure of the mine at the end of last year.
Aberdeen Asset Management was a high riser after its annual results came in in line with expectations and the company maintained its dividend.
Homewares retailer Dunelm ticked up after agreeing to buy the assets of the WS Group – which owns Worldstores, Achica and Kiddicare – for £8.5m.
Capital & Counties Properties was also on the front foot as it said it is on track to hit its estimated rental value target of £100m at Covent Garden by December next year as leasing activity has been positive.
Grainger was little changed after agreeing to buy a private rented sector build-to-rent development in Bristol for £45.7m.
On the downside, Tesco fell following a report in The Times that investigators are looking into whether Tesco Bank ignored a warning about a security flaw in its payment system that allowed fraudsters to steal millions of pounds from the accounts of thousands of its customers.
