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Energy companies plunge on price cap

British GasShares in energy companies plunged after Prime Minister Theresa May announced plans to cap energy prices in line with the Conservative party election manifesto.

Scottish Gas owner Centrica sank 4% to a 14-year low, closely followed by SSE (down 2%) after Mrs May told the Tory party conference she would tackle “rip-off” pricing.

Both had been falling earlier in the session as traders expected an energy policy announcement.

Neil Wilson, a senior market analyst at ETX Capital, said: “Any move to cap prices would be a massive hit to the industry.” He estimated the impact of a cap on Centrica at £200m.”

Housebuilders were largely unmoved despite Mrs May’s pledge of £2 billion towards affordable housing. However, they had already risen on the government’s commitment to the Help to Buy scheme.

It is expected that the new money will be aimed at local councils and housing associations rather than directly at housebuilders.

Food retailers were also among top fallers, with Tesco down 2.1% as investors, who drove the shares higher on the expectation of its return to paying dividends, took profits. The payout was also smaller than expected.

Standard Life Aberdeen shares fell 2.1% after the asset manager said it planned a subordinated debt issue.

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