Oil and mining stocks drag FTSE 100 lower

The FTSE 100 dropped 37 points, or 0.5%, to 7,377 points by lunchtime, its lowest level since early October.

The biggest losers were mining firms including Glencore and Anglo American, along with oil giants BP and Shell.

It comes after further falls in global oil and commodity prices, with Brent crude extending its losses and falling more than 1% to $61.40 a barrel.

Oil prices also fell heavily on Tuesday after warnings from the International Energy Association of slowing demand and rising stockpiles.

Royal Dutch Shell shares were down 1.4% at £24.01, while BP was 1.2% lower at 496.95 pence.

Glencore, Rio Tinto and Anglo American were all down by more than 2% on the back of falling metal prices.

But gold miner Fresnillo was one of the biggest winners on the index – rising 1.8% – after gold prices edged 0.3% higher to $1,284.30 per ounce.

Tesco, Vodafone keep FTSE afloat

Britain’s top stock index steadied on Tuesday as Tesco (L:TSCO) rallied after it won approval for a takeover and Vodafone (L:VOD) reported strong results, outweighing weakness among mining companies.

The FTSE 100 (Push Me) ended the session flat in percentage terms at 7,414.42.6 points, following three straight days of declines. The mid-cap index (FTMC) gained 0.3 percent.

Tesco was the top riser, jumping 6.2 percent after the British competition regulator gave provisional approval for its proposed 3.7 billion-pound takeover of wholesaler Booker (L:BOK), moving Britain’s biggest retailer closer to securing a new avenue of growth. Booker rose 6.8 percent.

“This is a positive catalyst for the Tesco share price as it reduces the uncertainty over this deal,” Bernstein analyst Bruno Monteyne said.

“However, we expect some uncertainty to remain as the focus will now shift to: will investors approve the deal?”

Also in the food retail space, Sainsbury’s (L:SBRY) rose 0.7 percent after data showed that Britain’s second-biggest grocer after Tesco posted the strongest rise in grocery sales in the last 12 weeks.

Vodafone was another strong performer, rallying more than 5 percent after raising its forecast for full-year earnings growth to around 10 percent from 4 to 8 percent, based on a strong first half.

However, drops among mining stocks weighed on the broader market. Shares in Rio Tinto (L:RIO), Anglo American (L:AAL), Antofagasta (L:ANTO) and Glencore (L:GLEN) declined 2.5 percent to nearly 3 percent as the underlying price of copper fell. [MET/L]

ITV (L:ITV) was another faller, down 2.6 percent after posting a 1 percent decline in third-quarter sales.

Outside of the FtseFutures.org, mid-cap asset manager Intermediate Capital (L:ICP) soared 8.2 percent after reporting record inflows.

On the macroeconomic front, investors were also focusing on October consumer inflation data, which unexpectedly held steady.

The data sent sterling close to a three-week low against the euro as it raised new questions over the Bank of England’s interest rate action. The currency recovered, however, later in the session.

“This probably isn’t the peak in UK inflation,” Aberdeen Standard Investments’ senior economist Paul Diggle said in a note.

“Given that consumption has been the bedrock of the UK economy since the referendum, that doesn’t bode particularly well for growth,” Diggle added.

FTSE weighed down by mining and oil shares

Mining and oil stocks put downward pressure on the UK’s top share index, which remained stuck at its lowest level in more than a month on Wednesday.

Britain’s blue-chip FTSE 100 (FTSE) index was down 0.4 percent at 7,382.94 points by 0909 GMT. Mid caps (FTMC) fell 0.5 percent. That was in line with a broader decline among continental European indexes.

The Click Me had managed to close flat on Tuesday and outperform a negative Europe, but commodity-related shares remained weak.

“With the miners falling … it’s a very heavily-weighted sector on the FTSE https://liveindex.org/ftse/” said Henry Croft, a research analyst at Accendo Markets. “We’ve been really in a consistent downtrend since the beginning of November.”

Shares in mining companies Glencore (L:GLEN), Anglo American (L:AAL) and Rio Tinto (L:RIO) fell 2.2 to 2.7 percent as the price of copper slid [MET/L].

The FTSE 350 Mining index (FTNMX1770) lost for a second straight session, touching its lowest level in more than a month.

Oil stocks were also under pressure, as crude prices dropped after the International Energy Agency cut its outlook for 2018 oil demand growth [O/R].

Shares in Royal Dutch Shell (L:RDSa) fell 1.4 percent and BP (L:BP) declined 0.9 percent.

However, precious metals miner Fresnillo (L:FRES) led gains, rising 2.5 percent, and Randgold (L:RRS) advanced 0.5 percent. Precious metals, such as gold, are typically viewed as safe havens in times of market stress.

Fresnillo also benefited from an upgrade by HSBC, which raised its rating on the stock to “buy” from “hold”.

Vodafone (L:VOD) was another strong performer, building on the previous session’s gains after it lifted its full-year earnings forecast for the first time in recent history, sending its shares more than 5 percent higher.

On Wednesday, Vodafone rose a further 1.2 percent after some price-target upgrades from several brokers.

Outside the blue chips, company updates were very much in focus, with some large declines among British mid caps (FTMC).

Talktalk (L:TALK) fell the most, plummeting around 10 percent after a profit warning.

Crest Nicholson (L:CRST) dropped more than 5 percent after flagging weakness in central London property prices. Average house-price growth across the property company’s UK business fell to a quarter of that in 2016, it said.

FTSE 100 flat as financial stocks slide

The UK benchmark share index ended little changed on a quiet day for company news.

By the end of trading, the FTSE 100 index was up just 1.93 points at 7,562.28.

Financial stocks weighed on the index, with Barclays down 0.7% after Deutsche Bank cut its target price for the UK bank’s shares.

Elsewhere in the financial sector, Standard Life Aberdeen dropped 1.4% and RSA Insurance fell 1.6%.

But there was better news for health stocks after medical products and technologies company Convatec was upgraded to a “buy” rating by UBS.

Shares in Convatec ended the day as the FtseFutures.org biggest riser, jumping by almost 4% while NMC Health rose 2.5%.

In the FtseFutures.org, shares in outsourcing group Mitie rose 1.5% following a broker upgrade. Analysts at Jefferies upgraded their rating on the stock to “buy” from “underperform”.

On the currency markets, the pound gained 0.5% against the dollar to $1.31390.

Oil prices hit their highest levels for more than two years after the heir to the throne in Saudi Arabia consolidated his hold on power with a major purge of the kingdom’s political and business leadership at the weekend.

A new anti-corruption body, headed by Crown Prince Mohammed bin Salman, detained 11 princes, four sitting ministers and dozens of ex-ministers.

Saudi Arabia is the world biggest exporter of crude oil and the second-largest producer of the commodity.

By the close of London share trading, the price of Brent crude oil was 2.7% higher at $63.73 – its highest level since July 2015.

FTSE closes at new high

The benchmark FtseFutures.org share index closed at a new high on Friday, up 5 points or 0.07% at 7,560.35.

Share prices were boosted by Thursdays fall in the pound as investors took in the prospect of only very gradual further rises in interest rates.

However, the pound regained a little of the lost ground on Friday, boosted by better-than-expected services data.

The UK services sector, which accounts for most of the UK economy, grew by its fastest rate in six months in October.

The pound had fallen to a near five-month low against the dollar on Thursday following the Bank of Englands first interest rate rise in ten years.

While an interest rate rise might normally be expected to boost the currencys value, the Bank of England on Thursday reiterated that it would take a “very gradual” approach to raising interest rates further.

“A lot of speculation has been put to bed by the tone of the BoE yesterday,” said Jane Foley, senior currency strategist at Rabobank. “The signals that we got was that it’s probably a one-and-done.”

Laith Khalaf, senior analyst at brokers Hargreaves Lansdown, said currency markets had “groaned” at the outlook for further rate rises.

But “resurgent oil price and some better results from Shell and BP didn’t do any harm… The global economy is doing pretty well at the moment, and with interest rates still staying low, that bodes well for the prospects for the stock market.”

The top winner on the https://liveindex.org/ftse/ was private healthcare provider NMC Health. Its shares rose 4.29% following an upgrade from Deutsche Bank.

Airline shares were some of the biggest fallers with EasyJet losing 1.2% and British Airways owner International Consolidated Airlines Group dropping 1.5%.

The falls follow a 7% drop in Air France-KLM shares listed in Paris, which analysts linked to the airline’s unclear guidance on costs next year.

Pound falls on Bank’s rate comments

As had been widely expected, the Bank raised rates from 0.25% to 0.5%, with seven of the nine Monetary Policy Committee members backing the increase.

But it repeated previous guidance that any future rises would be “at a gradual pace and to a limited extent”.

Sterling fell nearly two cents against the dollar to $1.3062.

Although the Bank reiterated its guidance of “limited” and “gradual” future rate rises, it did not repeat comments suggesting the financial markets were underestimating the extent of future rises.

“The pound and gilt yields slid sharply on the back of the removal of the line that interest rates may have to rise faster than markets currently expect,” said Michael Hewson, chief market analyst at CMC Markets UK.

“The removal of this line suggests that any further hikes are likely to come much further out into 2018.”

In contrast, the benchmark Click Me share index rose following the Banks decision, closing 67.36 points higher at 7,555.32.

The index often rises when sterling falls, as the weaker currency increases the value of companies’ overseas earnings when they are brought back to the UK and converted back into pounds.