Europe: Britain's FTSE hits March low as jitters return; Ocado leads fallers

[LONDON] British shares sank to their lowest since March on Tuesday as a broad sell-off hit stocks across Europe, caused by a toxic mix of weak results, jitters over geopolitical tensions, Brexit, Italy's budget and cooling markets overnight.

The FTSE 100, on track for its biggest monthly loss in a decade, closed down 1.24 per cent just below psychologically important 7,000 level.

Midcap FTSE 250 closed down 2.2 per cent at its lowest since February 2017, while European shares hit their weakest in nearly two years after a disappointing batch of third-quarter results, particularly in the tech sector.

Risk aversion pervaded the market, with gold mining, tobacco and utility companies among the few gainers on the day.

But most stocks were in the red. Sentiment deteriorated after Wall Street opened lower amid a toxic brew of renewed fears about the impact of the US-China trade dispute, geopolitical tensions and the strength of corporate results as peak earnings season arrives.

Caterpillar, considered a gauge for Chinese demand, was down 8 per cent after the heavy-duty equipment maker maintained its 2018 earnings forecast.

"We're back to where we were. We had a week of respite and now the market's resumed its focus on negative factors more than anything else," said Mike van Dulken, analyst at Accendo Markets.

In the UK, Ocado, one of the best performing stocks so far this year, was the biggest faller, losing 9.7 per cent for its worst daily performance in more than two years.

The sell-off in the online food retailer came ahead of Amazon results later this week and amid a broader sell-off led by tech stocks due to disappointing outlooks from chipmaker AMS and Swiss computer accessory maker Logitech International SA.

St James's Place sank to its lowest since December 2016 after results revealed a slowdown of inflows in the third quarter, even as the wealth manager reported funds under management reached a record. Shares were down 5.2 per cent.

Net inflow of funds rose 15 per cent in the first nine months, compared with 21 per cent growth in the first half.

"Q3 must have been a lot slower to average out. The growth of inflows in the third quarter must have slowed considerably," Mr van Dulken said.

"It all plays into consumer and investor uncertainty," he said, pointing to weakness in Hargreaves Lansdowne and Scottish Mortgage Investment Trust, which was the third biggest loser on the main board, down 4.5 per cent.

The financial sector knocked 21 points off the index while energy stocks slashed 36 points from the market due lower oil prices.

Gambling stocks were under pressure again after the Financial Times reported that UK chancellor Philip Hammond is considering cracking down on foreign taxes. GVC Holdings were the second biggest loser, down 7.1 per cent.

Whitbread Plc fell 1.5 per cent after the owner of Premier Inn hotels reported slower revenue growth in the first half amid growing economic and political uncertainty in Britain.

Among the few risers on the midcap index was Travis Perkins, Britain's largest supplier of building materials, which reiterated its full-year forecast after solid demand from trade buyers offset the pressure in Wickes, its UK DIY business.

REUTERS