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London open: Stocks slide on fall in oil prices, Brexit fears
UK equities declined on Wednesday as another slide in oil prices and fears over the consequences of a possible Brexit weighed on investor sentiment.
Oil prices fell on doubts that global producers will reach a deal proposed by Russia and Saudi Arabia to freeze crude production at January levels.
Brent crude slipped 1.1% to $32.90 per barrel and West Texas Intermediate dropped 2.1% to $31.20 per barrel at 0854 GMT.
Adding to woes in the markets, Britain’s businesses are worried that a vote to leave the European Union will deter investment in the UK.
However, the latest opinion poll has shown 51% of voters leaning towards the campaign to remain in the EU ahead of the 23 June referendum. The ComRes poll for the Daily Mail revealed 39% wanted a so-called Brexit while 10% were undecided.
“It will be a momentous decision and a vote for Brexit would have potentially huge consequences for all asset classes. Following a vote to leave, we think uncertainty could grip the UK economy, triggering a potential slowdown in growth and a collapse in sterling,” HSBC said in a note.
In economic data, the British Bankers’ Association releases figures on loans for house purchases in January at 0930 GMT, the US Mortgage Banker’s Association publishes its weekly mortgage applications data at 1200 GMT, Markit’s services purchasing mangers’ index is due at 1445 GMT and a report on US new home sales is out at 1500 GMT.
Among corporate stocks, Man Group’s shares edged lower after reporting a 20.25% fall in adjusted pre-tax profit for the full year.
Barratt Development jumped after hiking its dividend by a quarter after the housebuilder’s profits mushroomed in the first half of the year. Persimmon also continued to rally after reporting healthy full year results.
Hays slumped after the recruitment agency said it was mindful of increasing global uncertainties as it posted its half year results.
Meanwhile, Standard Chartered and BHP Billiton continued to tumble a day after reporting weak earnings.
