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Britain’s FTSE ends lower as mining stocks slump

Britain’s FTSE ends lower as mining stocks slump

LONDON: Britain’s top share index closed lower on Monday, extending its biggest weekly drop since February, as a slump in mining stocks outweighed a rally in travel and leisure stocks.

The FTSE 100 index finished 0.2 percent lower after falling 1.9 percent last week, with the drop marking the third straight week of losses.

The index is down around 2 percent so far this year.

The UK mining index slumped 7.9 percent on poor China trade data and a stronger dollar.

China’s exports and imports fell more than expected in April, underlining weak demand at home and abroad, though its overall trade surplus rose .

“Caution is the watchword,” said Peter Dixon of Commerzbank. “China’s economy is not going to show a massive pickup and I don’t think the sector would be able to generate the kind of earnings that it used to have until recent years.”

Shares in Anglo American, Glencore, Antofagasta, Rio Tinto and BHP Billiton fell between 5.6 percent and 13.8 percent. Steelmaker ArcelorMittal plummeted more than 12 percent, the biggest one-day percentage drop since late 2008.

Their decline offset gains by budget airline easyJet , which rose 3.8 percent on weaker oil prices and an upgrade to “outperform” from “underperform” from RBC.

Travel firm TUI was up 3.7 percent and Whitbread, Britain’s biggest hotel and coffee shop operator, advanced 2.6 percent.

Among mid-caps, security firm G4S rose 4.8 percent after saying it had made a positive start to its financial year.

Revenue from continuing businesses rose 4.5 percent in its first quarter and it suffered no new impairments on loss-making government contracts.

British baker Greggs rose 2.7 percent after its results.

Sales slowed, but traders were encouraged by the performance, especially given a 16 percent drop for the stock so far this year.

Copyright Reuters, 2016

Courtesy : BRecorder



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