Tuesday market close: Cairn shares tumble as losses widen

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.

The London Stock Exchange building. Picture: Getty
The London Stock Exchange building. Picture: Getty

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.

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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.