LONDON MARKETS: FTSE 100 Ends Lower, Weighed Down By Housing Stocks, Royal Mail
January 19 2017 - 12:07PM
Dow Jones News
By Carla Mozee and Victor Reklaitis, MarketWatch
Miners fall as dollar strength pressures metals prices
Stocks in the U.K. closed lower Thursday as home-builder shares
fell after a lackluster update on house prices, while Royal Mail
PLC shares struggled following a trading update.
The FTSE 100 lost 0.5% to end at 7,208.44, after rising 0.4% on
Wednesday
(http://www.marketwatch.com/story/ftse-100-in-recovery-mode-after-worst-selloff-in-six-months-2017-01-18).
British blue-chips remained in the red while the broader
European equity market briefly turned positive after European
Central Bank President Mario Draghi said the bank continues to
stand ready to extend stimulus measures for the eurozone economy,
if needed.
Read Live Blog recap of Draghi's press conference
(http://blogs.marketwatch.com/thetell/2017/01/19/ecb-live-blog-mario-draghi-expected-to-maintain-dovish-course/)
In London, a 6% drop dragged Royal Mail (RMG.LN) shares to the
bottom of the FTSE 100. The delivery company said U.K. sales
declined 2% in the nine months to Dec. 25
(http://www.marketwatch.com/story/royal-mail-uk-sales-fall-2-holds-to-outlook-2017-01-19).
But trading was in line with expectations, it said, as strong
performance over Christmas helped counter those poor figures.
Meanwhile, home-builder stocks lost ground after a Royal
Institution of Chartered Surveyors survey found U.K. house-price
growth slowed in December, for the first time since July.
Shares of Barratt Developments PLC (BDEV.LN) and Taylor Wimpey
(TW.LN) fell 2.1% and 1.3%, respectively, and Persimmon PLC
(PSN.LN) gave up 1%.
Miners on the move: Mining shares were moving lower as most
metals prices fell, with gold down about 1% and silver losing 2%.
The moves for metals came as the dollar rose, following Federal
Reserve Chairwoman Janet Yellen's comment
(http://www.marketwatch.com/story/feds-yellen-says-she-expects-rates-to-rise-a-few-times-a-year-until-end-of-2019-2017-01-18)
that the central bank expects a few interest rate hikes a year
through the end of 2019. A strong buck can make dollar-denominated
metals more expensive for holders of other currencies.
Copper miner Fresnillo PLC (FRES.LN) fell 3.4%, Randgold
Resources PLC (RRS.LN) (RRS.LN) lost 1%, and Anglo American PLC
(AAL.LN) shed 3.1%. But Antofagasta PLC (ANTO.LN) was up 0.7%.
Shares of BHP Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) gave up
0.6%. The mining heavyweight and its Samarco Mineracao SA joint
venture partner Vale SA (VALE5.BR) agreed a settlement plan with
federal prosecutors in Brazil
(http://www.marketwatch.com/story/bhp-billiton-vale-jv-agree-dam-settlement-plan-2017-01-19).
The plan covers negotiations over a $47.5 billion civil claim
linked to a deadly dam failure.
In other moves, Hammerson PLC (HMSO.LN) fell 2.9% following a
downgrade to underperform from hold at Jefferies, according to Dow
Jones Newswires.
Sterling was buying $1.2316, up from $1.2268 late Wednesday.
U.K.'s May and ECB's Draghi: The European Central Bank left its
key interest rates steady, as expected. Draghi at his press
conference in Frankfurt said there's still no sign of a
"convincing" upward trend in underlying inflation, although
headline inflation will probably continue to rise because of higher
energy prices.
The euro fell below $.1.06 on Draghi's dovish stance on future
QE, then was recently trading at $1.0629.
There will need to be "a significant increase in core inflation
and wages before the ECB would consider a further, faster or
earlier reduction of QE," said Carsten Brzeski, chief economist, at
ING in a note. "In our view, even a hint at 2018 tapering will not
come before the summer, after the Dutch and French elections and
the first possible impact of new U.S. economic policies."
Earlier Thursday, British Prime Minister Theresa May told the
World Economic Forum in Davos, Switzerland, that Britain is open
for business to the world after last year's Brexit vote. She said
the result of the referendum wasn't aimed at undermining the
European Union, but voters wanted the country to have greater
freedom to make sovereign decisions.
Read:May urges businesses to 'play by the same rules' that
ordinary workers follow
(http://www.marketwatch.com/story/may-urges-businesses-to-play-by-the-same-rules-that-ordinary-workers-follow-2017-01-19)
(END) Dow Jones Newswires
January 19, 2017 11:52 ET (16:52 GMT)
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