FTSE 100 falls into the red as investors lament effect of Trump's travel ban
The FTSE 100 fell into the red on Monday as investors lamented the effect of Donald Trump's travel ban on global business.
London's blue chip index closed lower by 0.9% or 66.01 points at 7,118.48 points, mirroring a dip in European equities, where the French Cac 40 and German Dax both dropped 1.1%.
Sterling also lost ground, falling 0.6% against the US dollar to 1.247, and dropped 0.5% against the euro to 1.167.
Investors were abandoning stocks and fleeing to safe haven assets like gold, which rose nearly 0.4% to 1,196.35 US dollars per ounce (£958.16), after Mr Trump introduced a travel ban on seven Muslim-majority countries and refugees.
Michael Hewson, a chief market analyst at CMC Markets UK, said investors were waking up to the downside of what Mr Trump's presidency might mean for riskier assets.
"It's been a disappointing start to the week as we head towards the end of January, as investors digest the latest executive order from US President Donald Trump, which has prompted large scale sell-offs across the board for European stocks, as concerns rise that the US may become a much less predictable place to do business."
In oil markets, Brent crude fell 0.3% to 55.30 US dollars per barrel (£44.33) after Baker Hughes data showed that the US rig count rose by 18 last week, raising fears that stateside output could counteract global supply cuts meant to buoy prices.
In UK stocks, Vodafone shares rose 2.6p to 195.95p after the company confirmed that its I ndian unit is in discussions to merge with Idea Cellular in a deal that would create the Asian country's biggest telecoms firm.
In an unscheduled announcement, the telecoms giant said talks are under way with Idea's owner, the Indian conglomerate Aditya Birla Group, about an all-share merger.
Lloyds Banking Group shares fell 0.96p to 64.91p as the Government announced it had reduced its stake in the bank by around 1%.
It means the taxpayer's stake in the bank now stands at 4.99%, with more than £18.5 billion being returned to Government coffers since the lender's £20.3 billion bailout.
Shares in Bargain Booze owner Conviviality fell 1p to 259p despite reporting a 211% jump in sales to £782.5 million in the 26 weeks to October 30, helping to swing the firm back into profit.
The group's performance was boosted by the £200 million acquisition of drinks supplier Matthew Clark, pop-up bar firm Peppermint and wine wholesaler Bibendum.
The biggest risers on the FTSE 100 were DCC up 130p to 6,320p, Paddy Power up 140p to 8,245p, Vodafone Group up 2.6p to 195.95p, and Pearson up 8p to 615p.
The biggest fallers on the FTSE 100 were Tesco down 8.75p to 197.8p, Rolls-Royce Holdings down 26p to 660p, Old Mutual down 7.3p to 205.9p, and Barclays down 7.2p to 223.4p.