London midday: Stocks fall as investors fret about rates, Evergrande

(Sharecast News) - London stocks had fallen into the red by midday on Thursday after a steady start, amid worries about interest rates and China's Evergrande. The FTSE 100 was down 0.3% at 7,567.75.

Earlier, shares in embattled Chinese property firm Evergrande were suspended from the Hong Kong Stock Exchange. No explanation was given, but on Wednesday, Bloomberg reported that the company's chair was under police surveillance.

Susannah Streeter, heads of money and markets at Hargreaves Lansdown, said: "Confidence in the company has hit rock bottom as it has tried to grapple for survival, weighed down by its mountain of debt It has been trying to reach a deal with creditors, but attempts to restructure its debts have hit the buffers due to official investigations into other workings of the vast company.

"Attempts by authorities to breathe new life into the crisis-hit property sector haven't failed to revive its fortunes. With the chairman now reported to be under police surveillance, and with no viable solutions in sight for its multitude of problems, liquidation looks increasingly likely. Given the size of the company, if all its operations are halted and a fire sale of its assets takes place, stopping contagion spreading into other sectors would prove highly difficult."

Meanwhile, the prospect of higher-for-longer rates continued to rattle investors.

Russ Mould, investment director at AJ Bell, said: "Another leg up in oil prices has added to the market worries about sticky inflation, thereby stoking fears that interest rates will stay higher for longer. Brent Crude moved higher to settle around the $95 per barrel mark and WTI was close behind after new data showed a further decline in US stockpiles.

"The market is worried that supplies of oil are going to be tight and if prices keep going, it is going to cause a real headache for businesses and consumers."

In equity markets, Phoenix Group, British American Tobacco, Barratt Developments, M&G and Rightmove all lost ground as they traded without entitlement to the dividend.

888 tanked after the gambling group said it expects revenue for the third quarter to fall by around 10% to £400m. Ladbrokes owner Entain also fell.

Digital9 Infrastructure tumbled as it scrapped its second-quarter dividend after a tough first half and said it swung to a loss of 6.63p per share in the six months to 30 June, compared with earnings of 3.43p a year earlier.

On the upside, pub and restaurant chain Mitchells & Butlers gained after saying it expects full-year earnings to be at the top end of expectations after a strong rise in sales and easing of cost headwinds.

Babcock also rallied as the defence contractor backed its full-year expectations, saying that trading since the start of the financial year has been "encouraging".

Market Movers

FTSE 100 (UKX) 7,567.75 -0.34% FTSE 250 (MCX) 18,115.63 -0.57% techMARK (TASX) 4,304.93 -0.49%

FTSE 100 - Risers

CRH (CDI) (CRH) 4,595.00p 2.25% Smiths Group (SMIN) 1,589.00p 1.21% Burberry Group (BRBY) 1,905.00p 1.06% Anglo American (AAL) 2,210.50p 0.66% Beazley (BEZ) 550.50p 0.64% Compass Group (CPG) 2,005.00p 0.63% BP (BP.) 540.80p 0.43% Haleon (HLN) 332.85p 0.42% Reckitt Benckiser Group (RKT) 5,762.00p 0.42% Glencore (GLEN) 455.35p 0.40%

FTSE 100 - Fallers

Phoenix Group Holdings (PHNX) 475.40p -6.38% Barratt Developments (BDEV) 440.10p -6.04% Ocado Group (OCDO) 588.40p -4.33% M&G (MNG) 194.90p -3.99% Entain (ENT) 908.20p -3.38% British American Tobacco (BATS) 2,560.00p -2.46% International Consolidated Airlines Group SA (CDI) (IAG) 145.40p -2.19% Flutter Entertainment (CDI) (FLTR) 13,355.00p -2.13% Taylor Wimpey (TW.) 116.25p -1.98% Next (NXT) 7,266.00p -1.65%

FTSE 250 - Risers

Ithaca Energy (ITH) 186.90p 5.24% Babcock International Group (BAB) 407.60p 4.94% NCC Group (NCC) 106.40p 3.30% Hill and Smith (HILS) 1,712.00p 2.76% Mitchells & Butlers (MAB) 220.40p 2.70% UK Commercial Property Reit Limited (UKCM) 54.10p 1.88% Trainline (TRN) 270.80p 1.65% HICL Infrastructure (HICL) 125.20p 1.62% 4Imprint Group (FOUR) 5,160.00p 1.57% Wood Group (John) (WG.) 160.30p 1.52%

FTSE 250 - Fallers

Digital 9 Infrastructure NPV (DGI9) 37.30p -32.67% 888 Holdings (DI) (888) 92.25p -16.52% Crest Nicholson Holdings (CRST) 171.70p -6.79% Petershill Partners (PHLL) 141.60p -5.85% Watches of Switzerland Group (WOSG) 520.00p -3.97% PureTech Health (PRTC) 187.80p -3.69% Wizz Air Holdings (WIZZ) 1,851.50p -3.54% TP Icap Group (TCAP) 165.40p -3.39% Ferrexpo (FXPO) 75.60p -3.26% IWG (IWG) 140.20p -3.04%