Home | Breaking News | FTSE hits three-month low as miners wobble
FILE PHOTO: A man shelters under an umbrella as he walks past the London Stock Exchange in London, Britain August 24, 2015.
FILE PHOTO: A man shelters under an umbrella as he walks past the London Stock Exchange in London, Britain August 24, 2015.

FTSE hits three-month low as miners wobble

WT24 Desk

Britain’s top share index dropped to a three-month low on Friday amid rising geopolitical tensions, with financials, miners and energy firms the biggest weights among blue chips, Reuters reports.

The blue chip FTSE 100 .FTSE index fell 1.2 percent to 7,305.09 points by 0907 GMT, on track for its worst week since March.

Drops among cyclical sectors weighed on the index, with heavyweight miners Antofagasta (ANTO.L), Rio Tinto (RIO.L), BHP Billiton (BLT.L), Anglo American (AAL.L) and Glencore (GLEN.L) all dropping between 3.6 to 5 percent, the biggest fallers on the index as tensions between the U.S. and North Korea hit riskier assets, including metals prices.

The broader UK mining sector .FTNMX1770 fell 3.6 percent.

This put the FTSE on track for its third straight day of losses, after U.S. President Donald Trump said that his earlier remark to unleash “fire and fury” on Pyongyang if it fired missiles to land near Guam, a U.S.-held Pacific island, may not have been tough enough.

“We’ve had such a period of low volatility in the markets, coupled that with high valuation, it only takes a bit of a wobble to cause a reaction like we’ve seen,” Jonathan Roy, advisory investment manager at Charles Hanover Investments, said, adding that the reaction was still quite tepid by historical standards.

“The miners have been quite resilient over the first few days of the sell-off, they held up relatively well, but today especially you’re starting to see that fall-out in mining stocks, so I think that brings in the question of Chinese demand,” Roy added.

Among the dozen or so risers, soft drinks bottler Coca Cola HBC (CCH.L) jumped around 1.7 percent and touched a fresh record high after several brokers upped their price targets for the stock, following a strong set of results in the previous session which saw the firm’s shares soar more than 9 percent.

“The business is in a sweet-spot, delivering volume improvement, strong price/mix and operating leverage,” analysts at Credit Suisse said in a note.

UK mid cap stocks .FTMC also came under pressure, falling 1.3 percent as shares in Dixons Carphone (DC.L) slumped more than 8 percent to its lowest level since the aftermath of the Brexit vote last June, driven down by a double downgrade from a star broker.

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