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Pearson leads FTSE fallers as publisher sees global revenues plunge 7%

Published 17/10/2016

The FTSE 100 Index fell 66 points to 6,947.55
The FTSE 100 Index fell 66 points to 6,947.55

London's top-flight index sunk into the red as investors punished education publisher Pearson over a lacklustre set of results.

The FTSE 100 Index dropped back below the 7,000 mark, down 66 points to 6,947.55, with the former owner of the Financial Times leading the market lower after reporting a 7% drop in underlying global sales in the nine months to September.

Pearson said declining revenues in its higher education courseware business had taken investors by surprise, with shares slipping more than 8% or 70p to 762.5p.

Oil majors were also weighing on the London market, with Royal Dutch Shell B and BP dropping 39p to 2,145.5p and 5.8p to 483.8p respectively.

Brent crude slipped 1.3% to 51.30 US dollars a barrel amid concerns over too much supply in the market despite plans by Opec to support prices next month.

Across Europe, Germany's Dax closed down 0.7% and the Cac 40 in France was 0.5% lower.

On the currency markets, the pound was slightly up against the US dollar at 1.219, as it pared mid-session losses triggered by reports that Chancellor Philip Hammond could step down after locking horns with MPs over immigration controls.

The Daily Telegraph reported that Mr Hammond has been attempting to put the brakes on the Government's "hard Brexit" plans.

However, the pound remained 0.2% lower against the euro at 1.107 euro.

Sterling has lost nearly 20% of its value against the US dollar since the Brexit vote and endured a torrid time on the currency markets amid fears Prime Minister Theresa May is seeking to break free of the European single market by opting for a ''hard Brexit''.

Jasper Lawler, market analyst at CMC Markets, said: " In a Cabinet with some hot-headed opinions on Brexit, Mr Hammond is viewed by markets as a cooler cucumber.

"His departure and the resulting political uncertainty would likely see another nose-dive in the pound and exacerbate the rise in gilt yields."

In UK stocks, shares in Paddy Power Betfair were down 155p to 8,700p after Ladbrokes and Gala Coral's merger moved a step closer.

The £2.3 billion tie-up picked up pace after they offloaded 359 betting shops in an attempt to allay competition concerns.

The deal will see rival Betfred shell out £55 million for 322 high street outlets and Stan James pay £500,000 for 37.

The move follows an assessment by the Competition and Markets Authority which found that the deal could "lead to a worsening of the offer made to customers at both a local and national level" in the gambling market.

The biggest risers on the FTSE 100 Index were Rolls Royce Holdings up 9p to 773.5p, Standard Chartered up 6.3p to 658.4p, BT Group up 3.4p to 378.7p and Lloyds Banking Group up 0.4p to 52.8p.

The biggest fallers on the FTSE 100 Index were Pearson down 70p to 762.5p, Admiral Group down 77p to 1,949p, Standard Life down 12.5p to 324.6p and Hargreaves Lansdown down 36p to 1,155p.

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