Energy companies are falling sharply for the second day running, in the wake of Labour's pledge to freeze prices for 20 months if it is elected.
Ed Miliband unveiled the plan at the party's conference on Tuesday, immediately causing a backlash from the companies involved. But in a belated reaction a day later Centrica and SSE both lost more than 5% of their value, or almost £2bn between them.
The falls are continuing with Centrica currently down 8p at 367.6p, not helped by a downgrade from JP Morgan Cazenove which moved from overweight to neutral and cut its price target from 390p to 375p.
SSE meanwhile is down 18p at £14.71. Ronnie Chopra, head of strategy at Tradenext, said:
Both these utilities are great cash generators in the current low interest rate environment and the sharp fall this week in their respective share prices may attract predators as both are take-over targets and if the price falls much further no doubt opportunistic bidders will appear.
Overall the FTSE 100 has edged 3.10 points lower to 6548.43, ahead of UK GDP figures. Investors also remain cautious about the US budget problems which could lead to a shutdown in the American government. Mike van Dulken, head of research at Accendo Markets, said:
The US running the show as usual, with uncertainty surrounding budget negotiations (deadline 1 October) and the debt ceiling (deadline 17 October) of the world's number one economy keeping optimism in check. While it sounds like there's potential for another short-term agreement on the budget (three months, through December) and Obama can ultimately raise the ceiling himself if necessary, the mere threat of a US shutdown and default by the reserve sovereign is enough to hold sentiment back.
Among the risers Tullow Oil has climbed 11p to £10.64 after announcing a new oil discovery in northern Kenya. Angus McCoss, the company's exploration director, said:
This success at the Ekales-1 wildcat is further evidence of the exceptional oil potential of our East African rift basin acreage... We are now increasing the pace of exploration in Kenya aiming for twelve wells in the next twelve months.
The news received a positive response from analysts with Exane BNP Paribas raising its target price from £14.75 to £14.85. Richard Griffith at Oriel Securities said:
This is still early days in the Kenya campaign but the sequential results suggest Tullow is delivering against the bigger picture view.
There is no revised volumetric guidance but pre-drill expectations were for 53m barrels of oil equivalent gross mean resources which we estimate would be worth 7.6p a share to Tullow provided the upcoming flow test is successful.
BAE Systems added another 5.7p to 467p after reports it had put in a bid for 60 Typhoon aircraft for the UAE.
