LONDON MARKETS: OPEC Concerns Drag FTSE 100 Lower For Second Day
November 29 2016 - 11:59AM
Dow Jones News
By Carla Mozee and Victor Reklaitis, MarketWatch
Mortgage approvals increase
U.K. stocks dropped Tuesday, with the benchmark index declining
for a second straight session as oil shares fell but housing stocks
strengthened after encouraging data.
The FTSE 100 dropped 0.4% to end at 6,772.00, adding to Monday's
decline of 0.6%
(http://www.marketwatch.com/story/ftse-100-stumbles-as-fading-opec-deal-hopes-slam-oil-stocks-2016-11-28),
which was the benchmark's first close lower in three sessions.
Oil producers on Tuesday extended losses from Monday on concerns
that talks are breaking down before OPEC's formal meeting on
Wednesday
(http://www.marketwatch.com/story/why-the-opec-meeting-is-likely-to-disappoint-in-one-chart-2016-11-29).
The Organization of the Petroleum Exporting Countries has been
trying to work out a deal to curb output.
BP PLC (BP.LN) (BP.LN) and Royal Dutch Shell PLC (RDSB.LN)
(RDSB.LN) slumped 2.1% and 2% in London trade, respectively, as
prices for West Texas Intermediate oil and Brent crude tanked more
than 3%.
Read:OPEC oil meeting: 7 things you need to know
(http://www.marketwatch.com/story/opec-oil-meeting-7-things-you-need-to-know-2016-11-28)
"The foremost weakness investors have been reminded of is its
dependence on stable and preferably rising oil prices," said Ken
Odeluga, market analyst at City Index, in a note. "Hence the FTSE
has been increasingly range-bound and yet nervy as investors eye
this week's discussions among big oil producing nations with some
trepidation."
For "the medium term, it is most important that [an OPEC] deal
happens at all: for the sake of oil prices, and, in turn, for the
oil and gas stocks which constitute the FTSE's single
heaviest-sector weighting, of around 14.7%," Odeluga wrote.
Read: Here's how ugly it could get for stocks if OPEC can't
reach a deal
(http://www.marketwatch.com/story/heres-how-ugly-it-could-get-for-stocks-if-opec-cant-reach-a-deal-2016-11-29)
Mining shares were also under pressure as most metals prices
fell, including a drop of more than 2% for copper prices .
Antofagasta PLC (ANTO.LN) lost 3.9%, Fresnillo PLC (FRES.LN) shed
3.4%, and BHP Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) was down
3%.
Home builders: The sector was moving higher after data showed
U.K. mortgage approvals rose in October to 67,518, from 62,932 in
September, the Bank of England said Tuesday.
Shares in Barratt Developments (BDEV.LN) were lifted by 2.3%,
Persimmon PLC (PSN.LN) tacked on 2%, and Taylor Wimpey PLC (TW.LN)
rose 2.1%.
The data is "certainly good news, but we're still cautious about
what higher inflation next year will mean for house purchases, as
the effect of lower sterling starts to hit disposable incomes,"
wrote Nicholas Hyett, equity analyst at Hargreaves Lansdown.
Consumer credit increased by GBP1.6 billion in October, which is
broadly in line with the average over the previous six months, the
central bank said. Consumer credit in September increased by GBP1.4
billion.
In other moves, BT Group PLC (BT.A.LN) finished higher by 1.2%
after starting the session in the red. The telecom provider's
regulator, Ofcom, said it would require BT to separate its
infrastructure arm Openreach
(http://www.marketwatch.com/story/bt-must-split-from-openreach-regulator-says-2016-11-29).
The move comes after BT failed to offer voluntary proposals that
addressed its competition concerns.
The pound bought $1.2500, up moderately from $1.2462 late Monday
in New York.
(END) Dow Jones Newswires
November 29, 2016 11:44 ET (16:44 GMT)
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