FTSE 100 dragged into red by resilient pound and weak mining stocks
London’s top tier index was hit by a slump in mining stocks following a drop in copper prices.
The FTSE 100 fell behind its European peers on Wednesday, having been weighed down by a strong pound and a decline in mining stocks.
London’s blue chip index ended the day lower by 0.28% or 20.99 points at 7,379.7 points, while others like the French Cac 40 and German Dax closed higher by 0.16% and 0.23%, respectively.
UK stocks were hit in part by continued strength in the pound – which continued to trade above 1.30 versus the greenback – as many of the FTSE 100’s listed multinational firms tend to benefit when foreign currencies are stronger.
Sterling was down 0.5% versus the US dollar at 1.321, but that still left the currency near one-year highs. Versus the euro, the pound was flat at 1.110.
It slumped in morning trading following unemployment figures which revealed a further fall in real wages.
The FTSE 100 index was also impacted by a drop in mining shares.
David Madden, a market analyst at CMC Markets UK, said: In London, miners like Rio Tinto, BHP Billiton, Anglo American, and Glencore are offside due to the large drop in the price of copper.
“The red metal is under pressure today as there are reports of heavy selling from commodity funds.”
A raft of mining stocks were holding the bottom spots on the FTSE 100, including Antofagasta down 39p to 969p, Fresnillo down 57p to 1,513p, and Anglo American down 44.5p to 1,349p.
Brent crude prices jumped 1.1% to around 54.85 US dollars per barrel to a near five-month high. It comes after the International Energy Agency (IEA) said that the global demand and Opec production cuts were starting to reduce the global oil glut.
In UK stocks, Sky edged lower by 5p to 932p.
The broadcaster confirmed on Wednesday that chief executive Jeremy Darroch’s total annual pay packet more than trebled to £16.3 million last year after he benefited from a generous share award.
Galliford Try fell 23p to 1,340p after reporting a 57% slump in annual pre-tax profits to £58.7 million, having taken a £98 million hit following a financial review of two major joint infrastructure projects.
Dunelm shares jumped 51p to 661.5p, despite confirming a 28.3% slump in pre-tax profits in the year to July 1 after being stung by costs related to its acquisition of Worldstores and falling store sales.
However, the group is still aiming to double sales to £2 billion.
Halfords rose 5.3p to 319.2p amid news that the retailer had named Graham Stapleton – the head of Dixons Carphone’s software business Honeybee – as its new chief executive.
Stapleton will start in his post on January 15, succeeding Jill McDonald, who is leaving at the end of this month to lead Marks & Spencer’s fashion and homewares arm.
The biggest risers on the FTSE 100 were Provident Financial up 14p to 846p, Micro Focus International up 30p to 2,428p, Barratt Developments up 7p to 603p, and Experian up 12p to 1,533p.
The biggest fallers on the FTSE 100 were Antofagasta down 39p to 969p, Fresnillo down 57p to 1,513p, Anglo American down 44.5p to 1,349p, and Johnson Matthey down 75p to 2,833p.