LONDON MARKETS: Commodity Stocks Pull FTSE 100 Toward Fifth Straight Decline
November 15 2017 - 4:45AM
Dow Jones News
By Carla Mozee, MarketWatch
Stocks in the U.K. fell Wednesday, heading for a fifth straight
loss, as a slide in oil prices pulled energy producer shares lower.
Elsewhere in commodities, a drop in metals prices knocked down
prices for miners.
After a disappointing reading on inflation Tuesday, investors
are focused on U.K. wages figures due later, likely to play a part
in the Bank of England's deliberations on the path of interest
rates.
What markets are doing: The FTSE 100 index dropped 0.4% to
7,383.17. The basic materials, gas sectors and financial sectors
fell by the most. But the telecom and utility groups moved higher.
On Tuesday, the London benchmark fell less than 1 point
(http://www.marketwatch.com/story/ftse-100-aims-to-break-losing-streak-as-tesco-vodafone-bounce-higher-2017-11-14),
enough to log a fourth consecutive decline.
The pound traded at $1.3179, up slightly from $1.3165 late
Tuesday in New York. Against the euro, sterling bought EUR1.1152,
not far off from EUR1.1158 in the prior session.
The yield on the 10-year gilt was down 2 basis points to
1.291%.
Commodities pressure: Prices for oil and most metals were under
pressure, which in turn weighed on shares of energy producers and
mining companies.
Oil prices slumped 1% Wednesday, extending losses logged Tuesday
after the American Petroleum Institute posted an unexpected rise in
weekly U.S. inventories for both crude oil and gasoline
(http://www.marketwatch.com/story/api-data-reportedly-shows-an-unexpected-jump-in-us-crude-supplies-2017-11-14).
Thomas Kee: To make money in oil, listen to prices more than
news
(http://www.marketwatch.com/story/to-make-money-in-oil-listen-to-prices-more-than-news-2017-11-14)
Copper prices gave up 0.7%, building on Tuesday"s fall. That
move came after disappointing Chinese data on industrial output
(http://www.marketwatch.com/story/china-industrial-output-slows-in-oct-as-expected-2017-11-13)
and housing sales
(http://www.marketwatch.com/story/china-housing-sales-slow-year-over-year-in-october-2017-11-13)
prompted concerns about slowing growth the world's second-largest
economy.
The oil and gas and basic materials sectors have a 24% weighting
on the FTSE 100, according to FactSet data.
What's moving markets: U.K. and European stocks were tracking
losses for futures for the Dow Jones Industrial Average and the
S&P 500 . U.S. stocks have been rattled by concerns about
delays to tax reforms from Washington. Republican senators are
strongly considering adding a repeal of Obamacare's individual
insurance mandate
(http://www.marketwatch.com/story/senate-republicans-strongly-consider-adding-obamacare-mandate-repeal-to-tax-bill-report-2017-11-14)
to a new version of their tax bill, Politico reported.
Read:Here's what happens if Obamacare mandate is repealed, as
Senate is considering
(http://www.marketwatch.com/story/heres-what-happens-if-obamacare-mandate-is-repealed-as-senate-is-considering-2017-11-14)
Meanwhile, investors will watch for wages and jobs data from the
Office for National Statistics, scheduled for release at 9:30 a.m.
London time, or 4:30 a.m. Eastern Time.
Analysts polled by FactSet are looking for weekly average
earnings to have risen 2.1%, excluding bonuses, and 2%, including
bonuses, in the three months to September. The unemployment rate is
forecast to hold steady at 4.3%.
What strategists are saying: "The average weekly earnings growth
could have eased to 2.1% from 2.2%. Soft wages growth means that
Bank of England will need to stay accommodative for longer. Dovish
BOE expectations could weigh on the pound along with ... Brexit
shenanigans," said London Capital Group's senior market analyst
Ipek Ozkardeskaya in a note.
Stock movers: Shares of oil producers Royal Dutch Shell PLC
(RDSB.LN) (RDSB.LN) and BP PLC (BP.LN) (BP.LN) shed 1.4% and 0.8%,
respectively, as oil prices lost ground.
Among miners, Glencore PLC (GLEN.LN) shares were 2.5% lower, Rio
Tinto PLC (RIO) (RIO) (RIO) gave up 2.2%, and Anglo American PLC
(AAL.LN) erased 2.1%. But Fresnillo PLC (FRES.LN) managed to move
up by 2.2%.
Barratt Developments PLC (BDEV.LN) shares fell 1.4% even as the
home builder said total forward sales rose 8.4%, indicating a
strong start to the new financial year
(http://www.marketwatch.com/story/barratt-developments-sees-strong-start-to-new-year-2017-11-15).
(END) Dow Jones Newswires
November 15, 2017 04:30 ET (09:30 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
FTSE 100
Index Chart
From Mar 2024 to Apr 2024
FTSE 100
Index Chart
From Apr 2023 to Apr 2024