Energy companies have belatedly reacted to Labour's plan to impose a price freeze if the party is elected.
In his showpiece speech at the party's conference on Tuesday, Ed Miliband said he would freeze gas and electricity bills for 20 months, prompting energy companies to claim blackouts would follow and investment in new plant would stall.
After shrugging off the threat in the immediate aftermath of the Labour leader's speech, the companies are now under the cosh. British Gas-owner Centrica has fallen 15.1p to 381.6p, a near 4% decline, although 4.9p of the drop is due to its shares going ex-dividend.
SSE has lost 51p to £15.29 while power station owner Drax - which also went ex-dividend - is down 12.5p at 680.5p.
The plan would be popular with voters but has upset the energy companies since it could cost them £4.5bn. Centrica said in a statement it would make it difficult for the company to operate:
The impact of such a policy would be damaging for the country's long term prosperity and for our customers.
But in his speech Miliband maintained the system was broken "and we are going to fix it."
Overall the FTSE 100 is down 28.39 points at 6543.07, following declines on Wall Street and in Asia on continuing worries the US budget impasse may lead to a government close-down next week. Ronnie Chopra, head of strategy at Tradenext, said:
With nervousness surrounding the US debt ceiling, investors globally took money off the table in the hope of buying back cheaply at a later date.
After Tuesday's disappointing 30% profit drop, Carnival lost another 162p to £20.96, while Tesco has lost 10.55p to 363.45p after JP Morgan downgraded from neutral to underweight:
We believe the UK food retailing industry has structural problems, and think Tesco will be most impacted. The discounters (Aldi, Lidl) are disrupting the price/range architecture that the big four used for two decades, the customer is demanding a simplified product range, and there is a need for reduced mid-tier pricing. With Tesco's initiatives having had limited success, weak like-for-likes, and margins persistently above peers', we think Tesco is more likely to go through a painful rebasing of pricing and the gross margin (synonymous to a profit warning).
Icap has dropped 6.6p to 389.1p ahead of news on possible fines on its part in the alleged fixing of libor, with reports of possible criminal charges against some of its employees.
