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London open: Stocks drop as US trading closed for holiday
UK stocks dropped on Monday which will prove a quiet day for traders with US closed for a holiday and no major economic data releases.
The FTSE opened down 25 points as gains in oil and mining stocks were offset by declines in banking and pharmaceuticals, led by Astrazeneca. The drugmaker continued to fall following last week’s news that trials for two of its key cancer treatments had been put on ice.
Brent crude oil was up 0.82% to $53.09 per barrel while West Texas Intermediate increased 0.85% to $50.06 per barrel, driven by a falling US oil rig count and suggestions that major oil producers will work together to address low prices.
“Whether last week’s gains in crude oil prices proves to be sustainable remains open to question and this could well limit any further upside, particularly if this week’s latest Chinese data shows no signs of an improvement, with the release of the latest CPI and trade data for September, over the next two days,” said Michael Hewson, chief market analyst at CMC Markets.
Meanwhile, traders shrugged off a rally in Chinese equities, after the China Securities Journal reported that the deputy governor of the People’s Bank of China said the country’s stock market correction is “almost over”.
Speaking at an annual meeting of the International Monetary Fund and World Bank in Peru, Yi Gang said corrections in Chinese stock markets have had a limited impact on the nation’s economy thanks to policy measures implemented by the PBoC.
In company news, Standard Chartered was a top faller following news last week that it could cut up to 1,000 senior jobs to reduce costs.
Glencore dropped as the troubled miner began the process of selling two of its copper mines in Australia and Chile.
Carillion jumped after expressing confidence with its full-year targets, as it said it has signed contracts, secured preferred bidder positions and been awarded frameworks worth around £1.7bn since 30 June.
