Equities pulled back from a five-month high on Wednesday with ex-dividend names weighing on markets in London as traders took a breather following a recent strong run.
The FTSE 100 snapped a nine-day winning streak this morning to trade around 0.5% lower than Tuesday's finish of 6,695.66, the index's highest closing high since May 28th when it closed at 6,762.01.
Stocks have surged over the past week as investors celebrated the end to the US government shutdown and the short-term deal to raise the debt ceiling. Meanwhile, hopes over a continuation of Federal Reserve monetary stimulus were sparked yesterday after a disappointing September jobs report.
Weighing on markets this morning was a sharp sell-off across Asian indices overnight on the back of concerns over the Chinese banking sector following a report that said that debt write-offs at the country's biggest lenders tripled in the first half.
According to Chief Market Analyst Michael Hewson from CMC Markets, "given concerns earlier this year about the Chinese shadow banking sector it would appear that the acknowledgement that there is a problem and Chinese authorities are starting to deal with it has seen some investors take some money off the table in case there are a lot more provisions to come".
The minutes of the latest Bank of England policy meeting will be released this morning following the decision by the central bank to hold the Bank Rate at 0.5% and maintain its asset purchase programme at £375bn.
Ex-div stocks provide a drag
A number of heavyweight stocks were trading in the red this morning after going ex-dividend, meaning that from today new investors won't be able get their hands on the companies' latest payouts. Smiths Group went ex-dividend today, along with BAE Systems and Rolls-Royce.
John Menzies, Senior, William Hill, Rank Group, Barratt Developments and JD Wetherspoon also went ex-div on the FTSE 250.
Banknote printer and ID services firm De La Rue was a big mover this morning with shares
sinking after the company warned that it would miss its full-year profit target by £10m owing to "challenging trading conditions".
Sports Direct edged higher after saying that sales in the nine weeks to September 29th were up 15.1% despite some tough comparatives with last year. Fellow retailer Home Retail also rose after a 53% jump in first-half profits owing to sales growth at its Argos and Homebase chains.
Chip designer ARM Holdings was a heavy faller for the second straight day as investors gave a cool reaction to its third-quarter results. Analysts at JPMorgan Cazenove maintained their 'neutral' rating on the stock this morning, saying: "With no upgrades to estimates expected in the next couple of quarters we see no reason to be building positions at this time and would take profits in the short term."
Costa and Premier Inn owner Whitbread was lower after Deutsche Bank downgraded the stock to 'hold', saying that it's time to "consolidate and take stock" after a great year.
FTSE 100 - Risers
RSA Insurance Group (RSA) 126.40p +2.02%
United Utilities Group (UU.) 715.00p +1.42%
International Consolidated Airlines Group SA (CDI) (IAG) 363.60p +1.28%
Associated British Foods (ABF) 2,097.00p +1.26%
Shire Plc (SHP) 2,521.00p +1.12%
Weir Group (WEIR) 2,361.00p +1.11%
Sports Direct International (SPD) 714.00p +1.06%
Reckitt Benckiser Group (RB.) 4,783.00p +1.04%
Carnival (CCL) 2,160.00p +0.89%
Compass Group (CPG) 906.00p +0.83%
FTSE 100 - Fallers
Smiths Group (SMIN) 1,405.00p -3.44%
Royal Bank of Scotland Group (RBS) 352.00p -2.76%
BAE Systems (BA.) 444.90p -2.48%
Aggreko (AGK) 1,471.00p -2.13%
HSBC Holdings (HSBA) 675.40p -1.79%
Rio Tinto (RIO) 3,206.00p -1.70%
GlaxoSmithKline (GSK) 1,574.00p -1.69%
ARM Holdings (ARM) 988.00p -1.59%
BT Group (BT.A) 363.10p -1.12%
Anglo American (AAL) 1,540.00p -1.03%
FTSE 250 - Risers
Pace (PIC) 310.50p +7.07%
Home Retail Group (HOME) 190.60p +3.42%
Laird (LRD) 233.00p +3.23%
BH Global Ltd. USD Shares (BHGU) 11.63 +2.02%
Chemring Group (CHG) 218.60p +1.63%
888 Holdings (888) 170.00p +1.55%
ITE Group (ITE) 303.50p +1.27%
Alent (ALNT) 358.60p +1.01%
Cranswick (CWK) 1,110.00p +0.91%
Diploma (DPLM) 686.00p +0.88%
FTSE 250 - Fallers
De La Rue (DLAR) 896.00p -8.66%
Telecity Group (TCY) 783.00p -5.32%
Premier Oil (PMO) 328.00p -3.53%
Hochschild Mining (HOC) 159.60p -3.04%
International Personal Finance (IPF) 650.00p -2.77%
Ocado Group (OCDO) 434.40p -2.38%
TalkTalk Telecom Group (TALK) 261.70p -2.35%
Kazakhmys (KAZ) 256.20p -2.21%
NMC Health (NMC) 348.00p -1.97%
Hansteen Holdings (HSTN) 106.00p -1.85%