LONDON MARKETS: FTSE 100 Faces Worst Session In Nearly 4 Months After Gloomy Housing, Trade Data

Hefty ex-dividend day for FTSE 100; Glencore shares fall

U.K. stocks dropped sharply Thursday, with home builders hurt after downbeat figures from the British housing sector, while U.K. trade numbers were a disappointment and a number of FTSE 100 companies were without dividend rights for the session.

The FTSE 100 fell 1.2% to 7,411.88, with only the health care sector showing a modest gain. The index was on course for its steepest percentage decline since April 18, according to FactSet data.

The benchmark on Wednesday dropped 0.6% (http://www.marketwatch.com/story/ftse-100-falls-as-us-north-korea-tensions-prompt-flight-to-safety-2017-08-09), hurt as investors fled so-called risk assets as tensions between the U.S. and North Korea escalated. Caution on that front lingered in U.K., European and Asian stock markets on Thursday.

In London, shares of home builders were pushed lower after the Royal Institution of Chartered Surveyors said U.K. house prices in July rose at the slowest rate (http://www.marketwatch.com/story/uk-house-prices-grow-at-slowest-rate-in-4-years-rics-2017-08-10) in more than four years. Headline price growth across the U.K. was 1% compared with 7% in June.

Shares of Barratt Developments PLC (BDEV.LN) fell 1.6%, Persimmon PLC (PSN.LN) lost 1.9%, and Taylor Wimpey PLC (TW.LN) gave up 2%.

"The RICS price expectations balance also fell to zero, indicating that estate agents anticipate broadly flat prices through the remainder of 2017," said Conall MacCoille, chief economist at Davy Research, in a note.

"However, the U.K. still faces the many uncertainties posed by Brexit. Clearly the housing market and its potential impact on the stretched U.K. consumers pose risks for the broader economy."

Data: Investors received a mixed batch of economic data (http://www.marketwatch.com/story/uk-industrial-output-rises-on-north-sea-oil-bump-2017-08-10) from the Office for National Statistics. Industrial production unexpectedly rose, by 0.5% in June, and factory production was flat in June compared with expectations for a modest decline.

But the U.K.'s trade deficit in goods in June widened to GBP12.7 billion, which was GBP1.7 billion more than expected by economists and higher than the GBP11.3 billion deficit in May.

"Trade and production data provide no evidence that exports or investment are picking up to offset a slowdown in consumer spending due to falling real wages," said Citi Research economists led by Antonio Montilla.

"We note the continued divergence between more bullish soft data and stagnant hard data, which makes us cautious on the growth outlook for 2H-17 and beyond amidst Brexit and political uncertainty," said Citi.

The pound did rise after the data, buying $1.2996, compared with $1.3004 late Wednesday in New York.

Stock movers: Coca-Cola HBC shares surged 7.6% after the beverage bottler said strong volume growth, price increases and improved packaging mix resulted in a rise in first-half earnings (http://www.marketwatch.com/story/coca-cola-hbc-earnings-rise-on-volume-growth-2017-08-10).

But shares of miner Glencore PLC (GLEN.LN) fell 1.7% even after the miner posted said it swung to first-half profit (http://www.marketwatch.com/story/glencore-swings-to-profit-on-commodities-boom-2017-08-10) and raised its full-year earnings outlook. The company's shares are still up 20% in 2017.

Meanwhile, 16 companies on the FTSE 100 were trading without dividend rights on Thursday, which can sometimes mean lower short-term share prices. Among those losing ground, Lloyds Banking Group PLC (LLOY.LN) (LLOY.LN) fell 1.2%, oil major Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) was down 0.7%. But miner Anglo American PLC (AAL.LN) moved up 0.4%.

Travel services company TUI AG backed its guidance for at least 10% growth for the year (http://www.marketwatch.com/story/tui-sees-summer-trading-in-line-with-expectations-2017-08-10) and said this year's summertime business is in line with its expectations, with good demand for hotels, cruises and holidays. But shares were down 1.8% on Thursday.

Prudential PLC's (PRU.LN) first-half net profit more than doubled to GBP1.51 billion pounds ($1.96 billion), helped by a strong growth in its Asia business. The financial services company also said it will merge its U.K. businesses. Shares were off 0.9%. The stock has risen 12% this year.

(END) Dow Jones Newswires

August 10, 2017 07:12 ET (11:12 GMT)