London close: Big Oil, miners drag on Footsie

London's Footsie sagged following disappointing quarterly earnings from US aluminium giant Alcoa and as crude oil futures retreated after climbing to a one-year high during the previous session.

Retailers put in the best performance on the back of figures from the British Retail Consortium showing unexpectedly strong like-for-like sales for the sector during the month of September, while Big Oil and miners dragged.

The FTSE 100 dropped by 0.38% or 26.62 points to 7,070.88, but only after having first set a fresh intraday record at 7,128.03.

On a light day for economic data, all eyes were on central bank speakers and the gyrations of the pound on foreign exchange markets.

In testimony to the Treasury Select Committee, the Monetary Policy Committee’s newest member, Michael Saunders, said the Bank of England could “look through” the impact that Sterling’s fall might have on prices, even if it lasted for many years.

His remarks helped to staunch the bleeding in fixed income markets, sending yields on the benchmark 10-year Gilt lower by four basis points to 0.98%.

Saunders also said further weakness in Sterling would not surprise him and the pound duly obliged, retreating 1.14% to 1.2220 versus the US dollar.

Nevertheless, it should be noted that the greenback was on the front-foot across the board and not just relative to the pound.

Speaking overnight the president of the US Federal Reserve bank of Chicago, Charles Evans, said progress on meeting the central bank's inflation target had been "unsatisfactory", which might indicate that a December rate hike is not quite yet a done deal.

However, traders instead appeared to focus on his remarks that “one move isn’t that big of a deal either way”, sending yields on US government debt higher.

Evans's speech was delivered ahead of the release of the minutes of the Fed's last policy meeting and appearances from two other Fed speakers scheduled for the following session - including one by well-known policy 'hawk' Esther George.

UK data emerged from the British Retail Consortium on Tuesday, which showed like-for-like retail sales grew by 0.4% month-on-month in September, after a fall of 0.9% in August (consensus: -0.3%).

Yet economists at Pantheon Macroeconomics appeared unimpressed, telling clients that: "We continue to think, however, that a sharp slowdown in retail sales growth lies ahead, as firms reduce hiring and inflation soars. Indeed, sterling’s further depreciation over the last week suggests that goods prices will shoot up next year, reducing growth in retail sales volumes to a near-standstill."

The economic calendar was otherwise quite sparse.

Oil futures declined after the International Energy Agency observed in its October Oil Market Report that Saudi Arabia may need to cut production more in order to offset higher output from Iraq, Libya and Iran.

Clothing retailers put in strong performance

In corporate news, profits fell 20% in the first half of the year for specialist-fit clothing retailer N Brown, but this was ahead of company-compiled consensus forecasts and followed a recovery in sales in the second quarter.

The interim dividend was held flat as the company revealed the autumn-winter season has started in line with its plans as it adopts a "more assertive stance" on prices and an agile approach in order to cope with a backdrop which "remains volatile".

Fashion retailer Ted Baker reported a jump in interim profit as revenue grew and the company lifted its dividend following a good performance across all channels, despite challenging trading conditions.

In the 28 weeks ended 13 August, pre-tax profit rose to £21.5m from £17.8m on revenue of £259.5m, up 14.4% from the same period a year ago.

With these bullish reports allied to the BRC data and cooler weather, Next topped the FTSE 100 leaderboard.

Mid-caps dominated the news, with plastics group Victrex reporting an improved second half, but full year sales still shrank due to consumer electronics weakness that is expected to persist.

Retirement housebuilder McCarthy & Stone was higher on the back of improved trading in the first few weeks of the financial year in comparison to the sharp fall it experienced after the Brexit vote, while the company announced that its chief executive was stepping down after five years.

Market Movers

FTSE 100 (UKX) 7,070.88 -0.38%
FTSE 250 (MCX) 18,073.20 0.52%
techMARK (TASX) 3,571.76 -0.14%

FTSE 100 - Risers

Next (NXT) 4,712.00p 3.93%
International Consolidated Airlines Group SA (CDI) (IAG) 376.10p 3.69%
Marks & Spencer Group (MKS) 332.00p 3.27%
Travis Perkins (TPK) 1,475.00p 3.22%
Whitbread (WTB) 3,887.00p 3.16%
easyJet (EZJ) 900.50p 2.86%
Taylor Wimpey (TW.) 147.70p 2.71%
Burberry Group (BRBY) 1,516.00p 2.50%
ITV (ITV) 177.70p 2.42%
Lloyds Banking Group (LLOY) 53.64p 2.41%

FTSE 100 - Fallers

Old Mutual (OML) 197.50p -5.64%
Glencore (GLEN) 221.90p -2.68%
Capita (CPI) 584.00p -2.42%
Fresnillo (FRES) 1,647.00p -2.26%
BHP Billiton (BLT) 1,239.00p -2.21%
Mediclinic International (MDC) 898.00p -2.18%
Rio Tinto (RIO) 2,679.50p -1.94%
Shire Plc (SHP) 5,220.00p -1.93%
Centrica (CNA) 212.20p -1.76%
Legal & General Group (LGEN) 214.50p -1.65%

FTSE 250 - Risers

Brown (N.) Group (BWNG) 205.00p 16.54%
Sports Direct International (SPD) 293.50p 8.50%
Victrex plc (VCT) 1,753.00p 8.08%
McCarthy & Stone (MCS) 173.30p 6.32%
Allied Minds (ALM) 369.30p 5.39%
Pagegroup (PAGE) 366.50p 5.07%
Ted Baker (TED) 2,530.00p 4.76%
Millennium & Copthorne Hotels (MLC) 450.10p 4.43%
Riverstone Energy Limited (RSE) 1,200.00p 4.35%
Domino's Pizza Group (DOM) 372.70p 3.64%

FTSE 250 - Fallers

Hochschild Mining (HOC) 253.60p -5.09%
Centamin (DI) (CEY) 148.20p -4.63%
Tullow Oil (TLW) 269.00p -4.07%
Acacia Mining (ACA) 459.10p -3.53%
Meggitt (MGGT) 457.70p -2.49%
Vedanta Resources (VED) 642.00p -2.43%
Laird (LRD) 316.00p -1.86%
Greencore Group (GNC) 303.10p -1.78%
CYBG (CYBG) 259.40p -1.74%
Booker Group (BOK) 171.80p -1.72%