Home | Breaking News | FTSE lags Europe as commodity stocks drop
A worker shelters from the rain as he passes the London Stock Exchange in the City of London at lunchtime October 1, 2008. REUTERS/Toby Melville/File Photo

FTSE lags Europe as commodity stocks drop

WT24 Desk

Britain’s top share index fell on Tuesday, underperforming other European markets as energy and mining stocks were hit by weaker oil and metals prices, Reuters reports. The blue-chip FTSE 100 index .FTSE, which is more heavily weighted towards commodity-related stocks than continental European indexes, was down 0.6 percent in morning trading.

Signs that leading oil exporters were struggling to agree a deal to cut production to reduce global oversupply ahead of a meeting on Wednesday pushed Brent crude down 1.6 percent, while copper, gold, iron ore and steel also fell.[GOL/]

That pushed the FTSE mining stocks index .FTNMX1770 and the oil and gas index .FTNMX0530 down 1.9 percent and 1.5 percent respectively. “(With) continued production cut brinkmanship from both OPEC and Russia, scepticism is still rife about whether tomorrow’s official OPEC meeting in Vienna will be a success,” said Mike van Dulken, head of research at Accendo Markets.

Mining companies Fresnillo (FRES.L), Antofagasta (ANTO.L) and Randgold Resources (RRS.L) were the biggest fallers, down by between 2.3 percent and 3 percent. Shares in BP (BP.L) dropped 1.6 percent while Royal Dutch Shell (RDSa.L) slipped 1.4 percent.

Aberdeen Asset Management (ADN.L) fell 4.4 percent, after losing nearly 4 percent on Monday after its results, as RBC cut its target price on the stock. Other stocks with emerging markets exposure also came under pressure. But banks stabilised after Monday’s fall, with Barclays rising 1.4 percent, even though Asia-exposed HSBC (HSBA.L) and Standard Chartered (STAN.L) were flat.

Homebuilders Barratt Development (BDEV.L), Persimmon (PSN.L) and Taylor Wimpey (TW.L) also rose, gaining between 1.4 percent and 2.8 percent after Bank of England data showed mortgage approvals were stronger than expected in October.

Mid-cap stocks, which are less exposed to swings in commodity prices, rose. The FTSE 250 .FTMC was up 0.1 percent.

Shares in broadband company TalkTalk (TALK.L) rebounded 4.3 percent after touching a four-year low on Monday, as Britain’s telecoms regulator said it would try to force BT (BT.L) to legally separate its Openreach network infrastructure division into a legally separate entity.

This move would benefit smaller broadband firms such as TalkTalk as it would “allow them to see whether they have been paying over the odds for access to the UK’s copper and fibre optic network,” van Dulken said.

TalkTalk shares had fallen by a quarter over eight straight sessions after results earlier in the month, but have been up for the last three days. BT fell in early deals, but was last flat. Mid-cap food service company SSP Group (SSPG.L) jumped 6.7 percent after reporting stronger revenues and profits.

 

Leave a Reply

Your email address will not be published. Required fields are marked *

*

%d bloggers like this: