London’s top stocks performed worse than European peers on Thursday as a batch of bad news from big companies dragged the index into the red.
The FTSE 100 closed 61.23 points, or 0.85%, lower at 7,167.39.
Centrica and BAE Systems were largely to blame for the slump, while a gloomy mood was felt throughout global markets on the back of disappointing manufacturing data releases.
Centrica warned that its financial performance in 2019 will be hit by the energy regulator’s tariff price cap as it reported a double-digit increase in annual operating profits.
Shares tumbled by 16.05p to 121.5p.
Meanwhile shares in BAE Systems fell 39.6p to 464.8p after the defence giant warned that Germany’s ban on selling arms to Saudi Arabia may affect its ability to provide combat aircraft support services to the kingdom.
While the blue-chip index has been impacted by the pound’s sensitivity to Brexit headlines lately, sterling did not appear to be a factor in Thursday’s drop.
The pound was flat in the absence of new Brexit developments, trading up 0.05% against the euro at 1.151 and 0.03% up on the dollar at 1.306.
Michael Hewson, chief market analyst at CMC Markets UK, said: “There doesn’t appear to have been one particular catalyst, however weak manufacturing reports from Japan, France and Germany suggest that the global manufacturing sector is heading towards a possible recession. A raft of corporate earnings have also been disappointing which hasn’t helped.”
Elsewhere on the London market, the announcement of additional features by Uber Eats heaped further pressure on to Just Eat. Shares fell 35.2p to 699p.
The company has previously been urged by activist investor Cat Rock to seek a merger with a rival, while analysts speculated that Uber’s latest move showed it could be moving closer to acquiring either Deliveroo or Just Eat.
Shares in Purplebricks also tumbled by 39.6p to 125p after the online estate agency cut its annual revenue guidance and announced the departure of the bosses of its UK and US units.
In Europe, the German Dax rose 0.19% despite unexpectedly weak manufacturing output data. The French Cac meanwhile was flat.
The cloud of weaker manufacturing also hung over the US market, prompting global growth concerns.
“A slew of data released from the US across the afternoon failed to hit the mark and sent a shiver through the markets,” said Fiona Cincotta, senior market analyst at City Index.
“US durable goods orders grew just 1.2% in December, well short of the 1.7% forecast. US manufacturing activity, homes sales and Philadelphia Fed Business outlook all surprised to the downside.”
Impacted by the gloomier mood, oil prices slid. A barrel of Brent crude oil was trading 0.3% lower at 66.96 US dollars.
The biggest risers on the FTSE 100 were Relx up 80.5p to 1,765.5p, British Land up 7p to 580.8p, Land Securities up 10.2p to 879.4p, and WM Morrison up 2.6p to 229.85p.
The biggest fallers on the FTSE 100 were Centrica down 16.05p to 121.5p, BAE Systems down 39.6p to 464.8p, Imperial Brands down 112.5p to 2,601p, and Fresnillo down 37.1p to 990.4p.