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FTSE flops on miners, financials after China halt

The FTSE was southbound on miners and financials in the first session of 2016, much like Europe. Investors headed for safe-haven gold and silver following an overnight equities trading halt in China, sparked by a 7% market tumble there on economic fears.

To noon, FTSE 100 was down 138.01 points, or 2.21%, to 6104.31, with 97 of the top-100 stocks tapering. The index remains in the broad range seen since August 2015. FTSE 250 shed 239.51, or 1.37%, to 17,190.3. At 11.36am, crude was up more than 1%, WTI at USD37.43/bbl and Brent at USD38.01/bbl. Gold and silver were up, but copper fell.

Anglo American (AAL) chaired southbound proceedings with a dive of 6.67% to 279.48p, while Glencore (GLEN) flopped 6.49% to 84.61p. Other metals burrowers followed. Asia-focused bank Standard Chartered (STAN) dived 5.51% to 532.65p, while HSBC (HSBA) dumped 3.51% to 517.4p. Also lower were multiple insurers after Old Mutual (OML), down 4.58% to 170.7p.

Roughly 65 blue chips were down by 2% or more, with 23 losing 3% or greater. Pharmas tapered behind Shire (SHP), down 3.36% to 4540p, while investment specialists faltered in the wake of St James's Place (STJ), lower 3.62% to 971.5p, and Schroders (SDR), falling 3.29% to 2878p. Supermarkets, consumer goods, banks and utilities were also notable among fallers.

Rising blue chips were Randgold (RRS), up 1.96% to 4224p, easyJet (EZJ), up 0.66% to 1751.5p, and TUI AG (TUI), up 0.21% to 1213.5p. Meantime, property figured lower, as did multiple oil majors. Legal & General's (LGEN) latest move to pull out of non-core markets won the cold shoulder, its shares down 3.12% to 259.45p on selling its French division.

OTHER BLUE-CHIP NEWS

Sports Direct International (SPD), down 2.77% to 561p, has moved to clarify the role of Michael Murray, who heads the company's property team for the UK and internationally, following media reports that he was a director of the company.

RSA Insurance (RSA), down 3.38% to 412.1p, has completed the sale of its business in Italy to ITAS Mutua. This follows the receipt of regulatory approval.

Diageo (DGE), down 1.56% to 1827.5p, has completed the sale of its major wine interests, the US-based Chateau and Estate Wines and the UK based Percy Fox businesses, to Treasury Wine Estates, as announced on 14 October.

BIGGER MOVERS

Bagir (BAGR), up 26.67% to 4.75p, said Leumi Bank and Discount Bank have agreed an amended repayment schedule. At the same time, Bagir has secured agreement from those banks for a waiver of the testing of its financial covenants for Dec. 31, 2015, and June 30, 2016.

Evocutis (EVO) fell 23.68% to 0.07p has been notified by Horse Hill Developments that the Oil and Gas Authority has granted consent for an extended flow test over three separate zones in the Horse Hill-1 oil discovery well. Doriemus (DOR) and Stellar (STEL) issued similar statements but were unmoved, while UK Oil & Gas Investments (UKOG) rallied 5.45% to 1.45p.

Vast Resources (VAST), up 21.88% to 0.98p, has entered an agreement with Crede CG III Ltd under which it will subscribe for new shares of 0.1p each in the company to raise up to GBP5.0m and associated warrants.

ECONOMIC NEWS

UK mortgage approvals rose to 70,410 in November, from 69,800 in the previous month, while mortgage lending increased GBP3.9bn in November, from a previous and expected GBP3.6bn. UK net consumer credit grew GBP1.5bn in November, against a GBP1.2bn gain in October and an expected rise of GBP1.3bn. M4 money supply rose 0.4% in November, from October's 0.6%.

UK's manufacturing purchasing managers' index (PMI) dropped to 51.9 in December, from 52.5 in November and against views for a print of 52.7. Meantime, Euro zone's final manufacturing purchasing managers' index (PMI) for December was 53.2, versus an expected 53.1 and from a previous 52.8.

Germany's final manufacturing PMI in December came in at 53.2, beating forecasts for 53.2. France's final manufacturing PMI eased to 51.4, from 51.6 previously. Italy's manufacturing PMI for December hit 55.6, ahead of market views of an unchanged print of 54.9. Spain's came in at 53.4, which was marginally below the previous reading of 53.5.

LONDON HIGHLIGHTS

BSD Crown (BSD), down 15.38% to 16.5p, has been served with a motion for discovery under Israel Companies Law by Eldad Levi, who claims to hold 18,652 shares in the company. Green Dragon Gas (GDG), up 4.44% to 235p, exceeded its 2015 year-end exit rate gross production target of 12.0 BCFPY by delivering an actual 2015 exit rate of 12.12 BCFPY.

Midatech Pharma (MTPH), up 3.45% to 180p, has entered into a licensing agreement with Emergex Vaccines, a private UK biotechnology company focused on infectious diseases utilising Midatech's gold nanoparticle technology. It has also entered a service and manufacturing agreement with the company.

Grainger (GRI), up 3.31% to 240.5p, has exchanged contracts to sell its equity release division to Turbo Group Holdings, an entity owned by Patron Capital Partners and Electra Private Equity.

Smurfit Kappa (SKG) fell 2.25% to 23.06p after acquiring two paper-based packaging businesses in Brazil for 186m euros. The deal is immediately earnings accretive and will generate synergies of approximately 6m euros by end-2017.

Arria NLG (NLG) added 2.9% to 31p as it signed a Framework Agreement with a major electric utility in the Eastern region of the US. The AA (AA.), down 2.31% to 306.75p, has signed a major new B2B partnership contract to provide roadside assistance to Lex Autolease, the UK's leading fleet management and fleet funding specialist.

Cairn Energy (CNE) rose 1.62% to 160.25p as it confirmed the successful testing of the SNE-2 appraisal well, offshore Senegal, with positive results. Resource estimates for the SNE field would be fully revised and announced after further appraisal activity.

Epwin Group (EPWN), up 2% to 134.13p, has acquired Stormking Plastics. The deal is in line with Epwin's strategy to broaden its range of low maintenance building products, its technical capabilities and routes to market.

Other stocks in the news included Kennedy Wilson Europe Real Estate (KWE), UK Commercial Property Trust (UKCM), Trinity Exploration & Production (TRIN), Castle Street Investments (CSI), StratMin Global Resources (STGR), Phaunos Timber Fund (PTF) and Nighthawk Energy (HAWK).