London midday: Stocks fall as mining shares slide
UK equities declined on Wednesday as the pound rebounded and mining stocks slumped.
The FTSE 100 was down 0.23% to 6,804.77 points at the midday mark.
At the same time, the pound rose 0.45% against the dollar to $1.3139. A stronger dollar against other major currencies sent oil prices lower, with Brent crude down 0.81% to $47.98 per barrel and West Texas Intermediate down 0.63% to $46.06 per barrel.
Miners were under pressure as analysts at Clarksons Platou Securities said iron ore prices could drop below $50 a metric ton before the year-end. The Stoxx 600 basic resources index fell 1.5%.
BHP Billiton was among the biggest fallers on news it is set to strip chief executive Andrew Mackenzie of his annual bonus following the publication of a report into failures at the mining group’s Brazilian joint venture that led to last year’s collapse of a dam that killed 19 people.
On the upside, banking stocks rallied after Deutsche Bank boss John Cyran shot down reports of a merger with Commerzbank by saying the German lender is looking to downsize.
Barclays, HSBC, Lloyds and Royal Bank of Scotland were on the FTSE 100 leader-board.
On the economic data front, GfK’s headline UK consumer confidence index rose five points to -7 in August, which was slightly above consensus expectations of -8 but still well below the 12-month average of -1.
All five measures used to calculate the index increased in August, with the index of major purchases up nine points at +7 and the personal financial situation index up one point to 0.
In contrast, UK business confidence dipped in August, according to a survey. The Lloyds Business Barometer fell to 16% in August from 29% in July amid worries about Brexit affecting the economic outlook.
Nationwide revealed UK house price growth accelerated in August at 5.6% year-on-year and 0.6% month-on-month, compared to July’s 5.2% year-on-year and 0.5% month-on-month gains.
Elsewhere, the flash estimate of eurozone inflation came in lower than expected for August. Eurostat said inflation was stable compared with July at 0.2%, which was below economists’ expectations of 0.3%, as prices of food, industrial goods and services rose less than the previous month. Core inflation – which strips out energy – was down to 0.8% from 0.9%, below estimates for it to remain unchanged.
Stephen Brown, European economist at Capital Economics, said: “The unchanged headline inflation rate in August highlights the fact that price pressures in the eurozone remain weak and boosts the case for more monetary easing from the ECB."
Meanwhile, the unemployment rate came in at 10.1%, steady compared to June and down from 10.8% in July last year. It fell short of analysts’ expectations for a nudge down to 10%.
Still to come, the US private payrolls report from ADP will be in focus at 1315 BST. It comes ahead of the all-important US non-farm payrolls report on Friday, which investors will closely scrutinise after Federal Reserve chair Janet Yellen said the next interest rate hike depends on the strength of incoming data.
Market Movers
FTSE 100 (UKX) 6,804.77 -0.23%
FTSE 250 (MCX) 17,801.51 -0.26%
techMARK (TASX) 3,444.19 -0.58%
FTSE 100 - Risers
Berkeley Group Holdings (The) (BKG) 2,681.00p 3.31%
Barclays (BARC) 173.85p 2.78%
HSBC Holdings (HSBA) 568.30p 1.94%
Dixons Carphone (DC.) 375.40p 1.90%
Standard Chartered (STAN) 644.20p 1.82%
Lloyds Banking Group (LLOY) 59.81p 1.61%
Royal Bank of Scotland Group (RBS) 202.90p 1.40%
Taylor Wimpey (TW.) 162.80p 1.37%
Aviva (AV.) 430.30p 1.37%
Barratt Developments (BDEV) 498.10p 1.26%
FTSE 100 - Fallers
Fresnillo (FRES) 1,636.00p -3.20%
Anglo American (AAL) 791.60p -3.17%
BHP Billiton (BLT) 1,009.50p -2.98%
Randgold Resources Ltd. (RRS) 7,155.00p -2.79%
Rio Tinto (RIO) 2,290.00p -2.57%
Antofagasta (ANTO) 500.50p -2.15%
AstraZeneca (AZN) 4,916.50p -1.71%
Glencore (GLEN) 174.10p -1.67%
Bunzl (BNZL) 2,373.00p -1.66%
Travis Perkins (TPK) 1,675.00p -1.59%
FTSE 250 - Risers
Bovis Homes Group (BVS) 907.50p 2.83%
St. Modwen Properties (SMP) 282.20p 2.62%
Dunelm Group (DNLM) 906.50p 2.37%
Aldermore Group (ALD) 164.10p 2.37%
Bellway (BWY) 2,369.00p 2.20%
Capital & Counties Properties (CAPC) 297.90p 2.06%
Diploma (DPLM) 845.50p 1.87%
Crest Nicholson Holdings (CRST) 473.00p 1.81%
Saga (SAGA) 221.90p 1.79%
Close Brothers Group (CBG) 1,385.00p 1.69%
FTSE 250 - Fallers
Grafton Group Units (GFTU) 552.00p -9.21%
Inmarsat (ISAT) 766.50p -4.78%
Polymetal International (POLY) 1,067.00p -4.30%
Restaurant Group (RTN) 379.00p -4.29%
AO World (AO.) 169.90p -2.91%
Vedanta Resources (VED) 495.70p -2.90%
NCC Group (NCC) 321.20p -2.76%
Carillion (CLLN) 264.90p -2.68%
Hochschild Mining (HOC) 248.00p -2.63%
OneSavings Bank (OSB) 267.50p -2.62%