Tuesday market close: Cairn shares tumble as losses widen

The London Stock Exchange building. Picture: Getty

The London Stock Exchange building. Picture: Getty

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SHARES in Cairn Energy fell by more than 7 per cent after the Edinburgh-based oil explorer said that first-half losses had more than trebled.

A positive update on its plans to start evaluation work on a major prospect in Senegal failed to stop shares sliding by 11.2p, or 7.25 per cent, to close at 143.2p.

Elsewhere, blue-chip stocks drifted as housebuilders were hit by profit-taking and mining stocks suffered after another volatile session in Asia, and The FTSE 100 Index dropped 24.01 points to 6,526.29, the second session in a row in which it has edged lower.

Joshua Mahony, market analyst at IG, said the market had eased as figures showing rising UK core inflation “highlighted the fact that it’s only a matter of time before rates in both the UK and US will rise in anticipation of higher inflation”.

He added: “The 50 per cent rise in core inflation to 1.2 per cent shows that when stripping out the impact of lowered energy prices, the UK is on a clear upward trajectory which will both reassure and worry the BoE in equal measure.”

Housebuilder Persimmon was down nearly 2 per cent or 37p to 2,084p as investors banked gains following half-year results that saw pre-tax profits rise 31 per cent to £272.8 million for the six months to the end of June.

Meanwhile, miners were hit hard after Asian markets tumbled overnight – with China’s Shanghai Composite dropping more than 6 per cent. The slump came despite China’s central bank injecting the largest sum of money into the financial system on a single-day basis for more than a year-and-a-half amid fears of the yuan’s weakness and flows of capital out of the country.

Concerns over weakening demand in the world’s second largest-economy saw Antofagasta fall 12p to 561.5p, while BHP Billiton dropped 21p to 1,112.5p.

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