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Aug. 17, 2016, 12:10 p.m. EDT

FTSE 100 ends lower as shares of miners slump

Jobless claims unexpectedly fall

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By Carla Mozee and Sara Sjolin, MarketWatch


AFP/Getty Images

U.K. stocks finished lower Wednesday amid sharp losses for miners on the back of weaker metals prices, offsetting better-than-expected labor-market data.

The FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.06%  dropped 0.5% to close at 6,859.15, its second-straight day of losses. The index on Tuesday fell 0.7%, breaking an eight-day winning streak, the longest run of gains since October 2015.

Movers: Admiral Group PLC /zigman2/quotes/201079056/delayed UK:ADM +2.06%  was dragged to the bottom of the index as shares dropped 7.7%. The insurer said first-half pretax profit rose 4.3% and it raised its dividend by 23%. But Admiral said market volatility after the U.K.’s vote to leave the European Union had hurt the group’s solvency position.

Meanwhile, Old Mutual PLC  shares fell 2.1% following a ratings downgrade to neutral from outperform at Credit Suisse of the insurance and financial services provider.

Mining firms were also among biggest decliners, as metals prices dropped across the board on speculation the U.S. Federal Reserve will raise interest rates sooner than expected. Higher rates could lead to a stronger dollar that would make dollar-linked assets more expensive for other currency holders.

Shares of Antofagasta PLC /zigman2/quotes/200173667/delayed UK:ANTO +0.70%  lost 2.9%, Anglo American PLC /zigman2/quotes/201381512/delayed UK:AAL -0.04% dropped 2.7%, Glencore PLC /zigman2/quotes/201400686/delayed UK:GLEN +0.66%   /zigman2/quotes/209462106/delayed GLCNF +2.71%   fell 2.2%.

But shares of CRH PLC /zigman2/quotes/201759252/delayed UK:CRH +2.01%  rose 0.9% following news reports that the building-materials company may be included in the Euro Stoxx 50 index /zigman2/quotes/210599266/delayed XX:SX5P -0.73% .

Among midcaps, shares of Balfour Beatty PLC /zigman2/quotes/202863772/delayed UK:BBY -0.38%  climbed 3% after the infrastructure company reinstated its interim dividend and said its first-half pretax loss narrowed. The midcap FTSE 250 /zigman2/quotes/210598417/delayed UK:MCX -1.21%  was down 0.3% at 17,758.68.

Economic data: U.K. jobless claims for unexpectedly fell by 8,600 in July, suggesting the labor market fared well after the June 23 vote in the U.K. to leave the European Union. Analysts polled by FactSet had expected a rise of 10,000 people filing for unemployment benefits.


Office for National Statistics

Meanwhile, the Office for National Statistics said the unemployment rate came in at 4.9% in the three months to June. Average earnings, excluding bonuses, rose at an annual rate of 2.3%, meeting expectations.

“So far, the evidence…suggests that Brexit isn’t having much of an impact on the jobs market. In a way this is not surprising because everyone knows that it will be at least two years before the U.K. actually leaves the EU. But it is early days to gauge…we shouldn’t jump into any conclusions, the Bank of England certainly wouldn’t,” said Fawad Razaqzada, technical analyst, Forex.com, in a note.

The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.1195%  had risen to around $1.3055 after the data, but eventually moved back to its pre-data level around $1.3027. Sterling late Tuesday bought $1.3046.

Sterling may be able to gain strength later Wednesday, if minutes from the Federal Reserve’s meeting in July “reveal a dovish message,” said Razaqzada. Although “if we go by what William Dudley, president of the New York Fed, said yesterday—that a rate rise next month was still possible—the minutes may not be dovish after all, causing the GBP/USD to slump.”

The Fed’s minutes are due at 7 p.m. London time, or 2 p.m. Eastern time.

Read: The Brexit effect—the first hard U.K. data trickle in

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UK : FTSE UK
6,179.75
+3.56 +0.06%
Volume: 703,449
July 14, 2020 4:56p
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UK : U.K.: London
2,333.00 p
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15.76
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5.11%
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UK : U.K.: London
1,007.50 p
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1,967.40 p
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179.58 p
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$ 2.27
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2,950.00 p
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261.60 p
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Carla Mozée is a reporter for MarketWatch, based in London. Follow her on Twitter @MWMozee. Sara Sjolin is a MarketWatch reporter based in London. Follow her on Twitter @sarasjolin.

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