LONDON MARKETS: Mining, Retail Shares Tug FTSE 100 Slightly Into The Red
May 24 2017 - 4:29AM
Dow Jones News
By Carla Mozee, MarketWatch
Pound back below $1.30
Blue-chip stocks in the U.K. slipped Wednesday, with pressure on
mining shares setting up to pull the market lower for a second
straight session.
The U.K. FTSE 100 was down 0.1% at 7,481.04, led by the basic
materials and industrials sectors.
Mining shares were dragged down after Moody's downgraded China's
credit rating for the first time in nearly 30 years
(http://www.marketwatch.com/story/moodys-downgrades-china-rating-for-the-first-time-in-nearly-30-years-2017-05-24),
to A1 from Aa3. Moody's said it's concerned about the impact that
rising levels of debt will have on the world's second-largest
economy, which is a major buyer of industrial and precious
metals.
Iron ore heavyweights Rio Tinto PLC (RIO) (RIO) (RIO) and BHP
Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) were down 2.2% and 1.3%,
respectively. Copper miner Antofagasta PLC (ANTO.LN) gave up 1.3%
and Fresnillo PLC (FRES.LN) moved down 1.4%.
Also, Randgold Resources PLC (RRS.LN) declined 1.5% and Anglo
American PLC (AAL.LN) shed 0.7%.
A "ratings downgrade has been long overdue," for China, wrote
RBC Capital Markets, noting that the yuan dropped sharply against
the dollar after news of the downgrade. "However, the fact that the
rating wasn't cut by more given the deterioration in China's debt
metrics in the past decade saw [China's offshore currency] quickly
recoup losses."
Meanwhile, Glencore PLC (GLEN.LN) was down 1.1%. The miner said
it "made an informal approach to Bunge
(http://www.marketwatch.com/story/glencore-makes-takeover-approach-to-bunge-2017-05-24)...regarding
a possible consensual business combination." A deal with grain
maker Bunge Ltd. (BG) could make Glencore a major force in the U.S.
agriculture market.
Retailers: Shares of department-store operator Marks &
Spencer PLC (MKS.LN) flipped higher, rising 2.2%. They had been
lower at the start of the session after the company said full-year
profit fell to 117.1 million pounds ($152.2 million) from GBP406.9
million a year ago on weaker sales for clothing and non-food
items.
The company's "[d]ividend was flat but net debt was better at
GBP1.9 billion," said UBS in a note.
Shares of apparel and furnishings seller Next PLC (NXT.LN) were
down 0.7%.
Kingfisher PLC shares (KGF.LN) were shoved down 6.1% after the
parent of home improvement stores B&Q and Castorama said
first-quarter comparable sales fell 0.6%
(http://www.marketwatch.com/story/kingfisher-quarterly-same-store-sales-decline-2017-05-24)
on weak sales in France and disruption caused by a company
overhaul.
The pound bought $1.2973, compared with $1.2961 late Tuesday in
New York, ahead of the release of minutes from the Federal
Reserve's most recent meeting after European trading closes
Wednesday.
Read:Fed minutes may quell doubt about a June interest-rate hike
(http://www.marketwatch.com/story/fed-minutes-may-quell-fresh-doubts-about-a-june-rate-hike-2017-05-19)
Late in European trading hours Tuesday, the pound spiked up to
$1.3034. That hurt the FTSE 100 which turned lower to close down
0.2%. A stronger sterling can hurt the FTSE 100 as about 75% of the
revenues for the index's companies are generated overseas.
(END) Dow Jones Newswires
May 24, 2017 04:14 ET (08:14 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
FTSE 100
Index Chart
From Aug 2024 to Sep 2024
FTSE 100
Index Chart
From Sep 2023 to Sep 2024