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London Markets

July 16, 2018, 12:19 p.m. EDT

FTSE 100 logs first loss in 3 sessions as miners, oil stocks decline

Brexit bill heads back to parliament

By Carla Mozee, MarketWatch

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British Prime Minister Theresa May faces a new Brexit hurdle in parliament on Monday.

U.K. stocks finished in the red Monday, as oil shares were knocked lower and as mining shares struggled after data showed modestly slowing economic growth in China, sending London benchmark lower for the first time in three sessions.

How markets moved

The FTSE 100 index (FTSE:UK:UKX) stumbled 0.8% to close at 7,600.45. On Friday, the benchmark rose 0.1% and finished last week with a 0.6% rise, the first gain in three weeks.

The pound (XTUP:GBPUSD) traded at $1.3228, down from $1.3234 late Friday in New York.

What’s driving the market

Falls in commodity stocks hurt the FTSE 100, as they are heavily weighted on the benchmark. Shares of oil producers dropped to intraday lows Monday on talk of a possible U.S. release of oil from global crude reserves and data from the International Monetary Fund showing a slowdown in global economic growth.

Mining stocks struggled in the wake of Chinese figures on gross domestic product in the second quarter. Quarterly growth in China—the largest consumer of industrial metal copper—came in at 6.7%, the slowest rate since the third quarter of 2016, as Beijing continued efforts to rein in debt at financial institutions.

“The growth data may have been in line with economist expectations, and above Beijing’s own 6.5% target, but the risk is that Asia’s powerhouse slows even further should a U.S.-instigated trade war gather momentum,” said Accendo Markets analysts Mike van Dulken and Artjom Hatsaturjants in a note.

Europe, China and the U.S. have a duty “not to start trade wars,” said European Council President Donald Tusk, who spoke on Monday at a summit between European Union and Chinese officials in Beijing. The U.S. government last week said it plans to expand its tariffs against Chinese goods imported into the U.S. to $200 billion in products. President Donald Trump called the EU “a foe” of the U.S. in an interview with CBS Evening News that aired Sunday.

Read: These are the retail brands that will be hurt most by Chinese tariffs

Also: Here’s when Americans will start feeling the pain from escalating Trump-imposed tariffs

Also in focus on Monday will be fresh votes in the U.K. House of Commons on amendments to the bill that will take the U.K. out of the European Union. They will be the first votes on amendments related to trade after U.K. Prime Minister Theresa May won support for a soft-Brexit strategy from her cabinet when they met at Chequers earlier this month. That strategy includes negotiating for frictionless trade in goods between the U.K. and the EU.

But May’s vision moving forward prompted resignations by cabinet members David Davis and Boris Johnson, among others, and Monday’s votes face the prospect of rebellion by members of May’s Conservative Party. In an article published Monday in the Telegraph newspaper , Johnson, who had served as Foreign Secretary, wrote that Britain should “militate ceaselessly for free trade deals” and said Britain needs to believe it can stand strong in a post-Brexit environment.

Stock movers

Among miners, Glencore PLC  (LON:UK:GLEN)   (OTC:GLCNF)  dropped 1.3%, BHP Billiton PLC   (NYS:BHP)   (ASX:AU:BHP)  fell 2.5% and Antofagasta PLC  (LON:UK:ANTO)  gave up 0.7%.

In the oil sector, shares of Royal Dutch Shell PLC (LON:UK:RDSB)   (NYS:RDS.B)  fell 2.1% and BP PLC   (NYS:BP)  lost 2.3%.

Hargreaves Lansdown  fell 1.9% after the U.K. Financial Conduct Authority said it is considering banning exit fees from online investment platforms.

Micro Focus International PLC (LON:UK:MCRO)  lost 2.9% after Credit Suisse reportedly cut its rating on the software maker.

Indivior PLC (LON:UK:INDV)  soared 17% on the midcap FTSE 250 index (FTSE:UK:MCX) after the drugmaker late Friday said it won a preliminary injunction against Dr. Reddy’s Laboratories Ltd. (BOM:IN:500124)   (NYS:RDY)  over a product that treats opioid dependence.

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