London close: Resources drag FTSE down as sterling fades after Carney's comments

Stocks in London finished lower on Tuesday amid hefty falls in the shares of mining and oil majors, as traders bashed sterling down after Bank of England governor Mark Carney said the time was not right for an interest rate hike.

The FTSE 100 ended the day off by 0.68% to 7,472.71, alongside a loss of 0.51% in the FTSE 250 that took it to 19,771.71. These reversals were shared by indices in Europe and in Wall St's early deals.

A little time after 4pm, sterling was down heavily on the dollar and euro. Crude prices plunged into bear-market territory on oversupply concerns, while the price of copper flopped.

Unsurprisingly, the key fallers were miners and oil majors, with these sectors dominating the list of blue-chip fallers. Property and financials also suffered.

"Despite an optimistic open this morning, the FTSE has wilted into the close despite a dovish belated Mansion House speech from Mark Carney," said IG market analyst Joshua Mahony.

The disclosure that Carney saw no reason to raise rates for the time being came as no surprise given his voting pattern. It followed the more hawkish tone among BoE policymakers last week.

"Today saw the focus return to the fact that in this current uncertain climate, we are unlikely to see rate rise anytime soon," said Mahony.

Meanwhile, Chancellor Philip Hammond used his speech to reassure the city he would try and press for a transitional agreement keeping the UK in the customs union until new rules were implemented.

Sterling and the FTSE have been buffeted by concerns about the health of the UK economy, the hung parliament and, of course, Brexit, for which talks started yesterday.

Neil Wilson, senior market analyst at ETX Captial, said ratings agency S&P piled on yet more pressure by saying it did not need to wait for Brexit to downgrade the UK.

"Whatever way you cut there isn't much love out there for the pound at present. As Brexit talks start, the mood music is sounding gloomier for the UK."

Against this crowded house of developments, crude prices saw red on the global supply overhang.

"Clearly with crude supply elevated and summer demand not keeping up, there is reason to believe we could be looking at a summer of discontent for oil bulls," said Wilson.

In corporate news, Wolseley turned up the dial on sales in the third quarter, as the heating and plumbing group enjoyed good growth from its main US markets which offset a weak Britain.

British Gas parent Centrica said on Tuesday that its subsidiary, Centrica Storage Limited, is planning to end storage operations at its Rough gas facility.

Barclays edged lower after it and four former executives were charged by the Serious Fraud Office with conspiracy to commit fraud and the provision of unlawful financial assistance over the bank's emergency fundraising deal with Qatar at the height of the financial crisis.

Rio Tinto was also in the red after rebuffing a counter bid for its Australian thermal coal assets from Glencore and recommending that shareholders vote for a sale to Yancoal Australia.

Tesco ticked down as a technical glitch caused just under 10% of its grocery home shopping orders to be cancelled.

General miner Anglo American said the value of its rough diamond sales fell 6% on the year in the fifth De Beers sales cycle of 2017.

Market Movers

FTSE 100 (UKX) 7,472.71 -0.68%
FTSE 250 (MCX) 19,771.71 -0.51%
techMARK (TASX) 3,614.91 0.18%

FTSE 100 - Risers

Paddy Power Betfair (PPB) 8,660.00p 1.58%
Smurfit Kappa Group (SKG) 2,375.00p 1.45%
AstraZeneca (AZN) 5,416.00p 1.35%
Morrison (Wm) Supermarkets (MRW) 247.50p 1.23%
Micro Focus International (MCRO) 2,428.00p 1.17%
Sage Group (SGE) 720.00p 1.05%
Convatec Group (CTEC) 328.90p 0.98%
Carnival (CCL) 5,215.00p 0.97%
Scottish Mortgage Inv Trust (SMT) 414.70p 0.95%
Pearson (PSON) 712.00p 0.92%

FTSE 100 - Fallers

Antofagasta (ANTO) 755.50p -4.67%
Glencore (GLEN) 276.60p -3.94%
BHP Billiton (BLT) 1,140.00p -3.31%
Next (NXT) 4,024.00p -2.99%
Rio Tinto (RIO) 3,000.00p -2.85%
Anglo American (AAL) 959.40p -2.72%
BP (BP.) 460.90p -2.62%
Marks & Spencer Group (MKS) 341.60p -2.57%
Lloyds Banking Group (LLOY) 67.01p -2.46%
United Utilities Group (UU.) 938.50p -2.34%

FTSE 250 - Risers

BTG (BTG) 693.00p 2.82%
Syncona Limited NPV (SYNC) 157.50p 2.81%
Stobart Group Ltd. (STOB) 301.90p 2.69%
Worldwide Healthcare Trust (WWH) 2,542.00p 2.60%
Melrose Industries (MRO) 259.00p 2.01%
National Express Group (NEX) 380.00p 1.93%
Fidessa Group (FDSA) 2,417.00p 1.77%
Euromoney Institutional Investor (ERM) 1,148.00p 1.67%
Indivior (INDV) 321.30p 1.42%
Hiscox Limited (DI) (HSX) 1,292.00p 1.41%

FTSE 250 - Fallers

IWG (IWG) 333.00p -7.37%
Domino's Pizza Group (DOM) 295.00p -6.50%
Ferrexpo (FXPO) 179.90p -6.08%
Kaz Minerals (KAZ) 465.00p -5.74%
Tullow Oil (TLW) 150.60p -4.86%
OneSavings Bank (OSB) 382.00p -4.50%
Evraz (EVR) 173.20p -4.36%
Vedanta Resources (VED) 578.50p -3.82%
Pennon Group (PNN) 878.00p -3.73%
IMI (IMI) 1,216.00p -3.57%