Global Stocks Slide As Bond Curves Steepen On Central Bank Concerns; Oil Falls

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DCC, the energy-to-technologies conglomerate, became one of only five FTSE 100 stocks to survive the latest sell-off, which wiped almost £35bn off Britain’s leading companies.

In a trading update, the Irish company said operating profit in the third quarter was “significantly ahead of the prior year”.

Its energy unit enjoyed stellar growth, despite milder winter weather. The group’s recent acquisitions - Esso Retail France and Butagaz - performed in line with, or modestly ahead of, expectations.

While overall heating-related volumes were “held back” by mild temperatures, “a good margin and cost performance was achieved”. However, its technology division fell short of 2014’s figures, as the unit was hurt by a reduction in demand for tablet, smartphone and gaming products.

Justin Jordan, of Jefferies, said: “DCC remains a beacon of consistent delivery in an uncertain market.”

Before updating the market on its progress, shares in the Irish firm had slumped 11.4pc so far this year. Yesterday, it enjoyed a relief rally, advancing 215p, or 4.3pc, to £52.30.

On the broader market, the global flight to safety changed up a gear, as investors dumped equities in favour of gold and bonds. Stock markets were drenched in red by the close, after a surprise move by Sweden’s central bank to slash its benchmark interest rate further below zero.

European bourses slumped to a two-and-a-half-year low in intraday trading. The

CAC in Paris was down 4.05pc, Frankfurt’s

DAX was 2.93pc lower and the Spanish

IBEX was off by 4.88pc.

Back in London, the

FTSE 100 closed at 5,536.97 - down 135.33 points, or 2.39pc - its lowest level since July 26 2012.

Alastair McCaig, an IG analyst, said: “Calm calculations have been few and far between, as markets have had one of their most volatile days since the financial crisis.

“Equities in the UK and Europe have continued to struggle as a steady stream of disappointing corporate data has given the bulls little reason to move into action, regardless of how oversold they appear.”

More than £80bn has been wiped off the FTSE 100 so far this week.

Financial services firm

Prudential became the biggest casualty on the FTSE 100, as its shares tumbled 88.5p, or 7.5pc, to £10.87.

Aberdeen Asset Management dropped 7.4pc to 209.3p.

Nicholas Hyett, of Hargreaves Lansdown, said the “baltic bombshell” from the Swedes had taken its toll on Prudential, as its asset management arm, M&G, is one of the largest in Europe.

The banking sector, which has been at the centre of the recent market storm amid fears it may be unable to repay debts, nose-dived to a seven-year low. The FTSE 350 banking index dropped by almost 5pc.

Barclays was among the biggest fallers, down 7pc at 147.9p, after French bank Societe Generale posted a torrid set of results, and shares in Credit Suisse tanked to a 25-year low. Shares in Lloyds Banking Group and Royal Bank of Scotland both recorded losses of 4.1pc.

Asian-focused

HSBC Holdings and

Standard Chartered also suffered hefty losses - down 4.8pc and 5.1pc respectively - in the wake of another sharp sell-off in Asia, driven by persistent worries about a slowdown in Chinese growth.

Mining stocks joined the rout, after

Rio Tinto reported a full-year loss of $866m and announced plans to scrap its progressive dividend policy. The shares slipped 60p, or 3.4pc, to £17.05.

Analysts at Investec said the miner’s forward guidance reflected “a company preparing itself further for tougher times”, by reducing dividends and announcing painful cost reductions. Its peers also fell, with

Glencore down 6.2pc,

Anglo American off by 3.4pc and

BHP Billiton nursing losses of 3pc.

Meanwhile, the rally in gold lifted precious metal producers to the top of the blue-chip index, as investors sought safety.

Randgold Resources jumped 7.5pc to £61.30 and

Fresnillo advanced 5.4pc to 875p.

Tobacco group

Imperial Brands also joined the FTSE gainers, up 2pc to £35.88, after it recorded a rise in first-quarter revenue as a result of price increases across several markets.

Interserve crashed to the bottom of the mid-cap index following a downgrade. Liberum slashed its rating from “buy” to “hold” amid concerns about deteriorating macro conditions in the Middle East, due to the collapse in oil prices. The cut follows results from

WS Atkins on Wednesday that pointed to a slowdown in its Middle Eastern business. Interserve’s shares fell 60p, or 14.1pc, to 365p, while WS Atkins closed 7.8pc lower at £11.87.

Elsewhere, a rating upgrade did little to lift British Airways owner

IAG. Cantor Fitzgerald hiked its rating to “hold” from “sell” amid expectations that the airline will hit its full-year profit target.

Robin Byde, of Cantor Fitzgerald, said: “IAG is strategically well positioned and is attractively valued.”

However, Mr Byde cautioned that earnings are “always vulnerable to a downturn” in the global economy. The FTSE 100 stock ended the day in the red, down 5.6pc at 478.5p.

Meanwhile, shares in

Smith & Nephew dipped 30p, or 2.8pc, to £10.51 after UBS cut its rating to “neutral” amid expectations of slower growth in its wound division in the second half of 2015.

As 2016 guidance “implies little or no underlying margin expansion beyond known effects”, Ian Douglas-Pennant, of UBS, added: “We do not have sufficient confidence in the opportunity to maintain a 'buy’ rating.”

Finally, publishing and events group

Informa climbed the FTSE 250 after its earnings per share came in ahead of expectations at 42.9p for the year. The mid-cap stock rose 3.8pc to 612.5p as a result.

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Source : http://www.telegraph.co.uk/finance/economics/12151386/Hong-Kong-follows-global-rout-as-shares-plunge-live.html

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