FTSE 100 in the red as mining shares slump
U.K. shares swung lower Monday, with mining shares struggling at the start of the new trading week.
The FTSE 100 UKX, -0.66% fell 0.8% to 6,258.28. All sectors declined, led by the basic materials and oil groups. The blue-chips index on Friday dropped 1.1%, ending last week lower by 0.5%.
The British benchmark on Monday was seeing “mining stocks dominating the lower reaches of the index with a bit of skepticism in play here over just how much more headroom is left in terms of a rally for underlying prices,” said Tony Cross, market analyst at Trustnet Direct in a note. “There’s little restraint being shown in terms of reining in production and China’s ability to keep consuming does have limits.”
At the bottom of benchmark, platinum provider Anglo American PLC AAL, -6.18% dropped 6.5%, iron ore heavyweight BHP Billiton PLC BLT, -5.07% BHP, -3.11%BHP, -3.28% fell 5.5% and Rio Tinto PLC RIO, -3.81% RIO, -2.77% RIO, -2.95% lost 4.1%.
But topping the index, Imperial Brands PLC IMB, +3.02% shares climbed 3% following a ratings upgrade of the tobacco maker to buy at Goldman Sachs. Equipment rental company Ashtead Group PLC AHT, +2.75% gained 2.6% after a ratings upgrade to buy from underperform at Bank of America Merrill Lynch.
On the midcap FTSE 250 MCX, +0.64% Sports Direct International PLC SPD, +0.96% shares were up 0.6% following reports the retailer had discussed a possible buyout of BHS, a privately held department store operator.
BHS went into administration on Monday, according to reports, putting roughly 11,000 jobs at risk.
Sterling: The pound GBPUSD, +0.6666% scaled up 0.6% to $1.4494, hitting six-week highs and extending gains after U.S. President Obama urged Britons on Friday to stick with the European Union when they vote on “Brexit” on June 23. Obama also said an exclusive trade deal between Britain and the U.S. could take up to 10 yearsto negotiate if the U.K. were to leave the EU.
“As the odds of Brexit have been slashed so too have short positions in the pound, for there was nothing else constructive last week to support the currency as the latest employment and retail sales figures both disappointed expectations,” said Fawad Razaqzada, market analyst at City Index and Forex.com, in a note.
Investors will watch for preliminary first-quarter GDP data on Wednesday, he added, with expectations for a 0.4% reading compared with 0.6% growth in the fourth quarter.
Source: Market Watch
