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Weaker commodity-related stocks push FTSE to 2-week low

Weaker commodity-related stocks push FTSE to 2-week lowWeaker commodity-related stocks push FTSE to 2-week low

(ADVISORY- Follow European and UK stock markets in real time on
the Reuters Live Markets blog on Eikon, see cpurl://apps.cp./cms/?pageId=livemarkets)

* Blue-chip FTSE 100 index closes 0.4 pct lower

* Mining and energy stocks down on weaker metals, oil prices

* Housebuilders feature among top gainers

By Kit Rees and Atul Prakash

LONDON, Aug 22 Britain’s top share index slipped
to its lowest level in nearly two weeks on Monday, with
commodity-related stocks leading the market lower following a
drop in metals and crude oil prices.

The commodity-heavy FTSE 100 ended 0.4 percent
weaker at 6,828.54 points after hitting a low of 6,812.07, the
lowest since Aug. 9. The index has fallen 2 percent in a week.

The UK mining index fell 2.7 percent after
copper hit a five-week low as the dollar gained on hawkish
comments from a Fed official and inventories rose. Other
industrial metals and gold also fell sharply.

Shares in Anglo American, Fresnillo,
Randgold Resources, Antofagasta and Glencore declined between 2.5 percent and 5.9 percent.

The oil and gas index dropped 1.5 percent after
crude oil prices fell nearly 3 percent as China ramped up
exports of refined products, U.S. oil producers added rigs for
an eighth consecutive week and prospects emerged for higher
exports from Iraq and Nigeria.

“A more hawkish tone from a succession of Fed officials
along with a sharp slide in oil prices has seen the FTSE 100
feeling the worst of the declines due to weakness in the mining
and oil and gas sectors,” said Michael Hewson, analyst at CMC
Markets, referring to the FTSE’s underperformance against a flat
STOXX Europe 600 index.

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“(However) housebuilders have managed to attract some
further buying interest. Some of the more bearish sentiment
surrounding the UK economy and the housing market appears to be
dissipating as a host of economic forecasts dial back their more
bearish outlooks for the UK economy.”

Shares in housebuilders Taylor Wimpey, Barratt
Developments and Berkeley Group gained between
2.5 percent and 3.5 percent.

The shares had fallen heavily following the UK’s vote to
leave the European Union in June. They have since risen off 2016
lows but are yet to break above their pre-Brexit levels.

“On the one hand you’ve got the possibility of an economic
downturn, but equally you’ve got really low mortgage rates, and
you also have a very large imbalance in the supply and demand of
housing … and that’s going to help support property prices,”
Laith Khalaf, senior analyst at Hargreaves Lansdown, said. (Editing by Robin Pomeroy)

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