Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday

FTSE slips 0.6% as miners, energy weaken

FTSE slips 0.6% as miners, energy weaken
Comment E-mail Print Share
First Published: Mon, Sep 14 2009. 01 17 PM IST
Updated: Mon, Sep 14 2009. 01 17 PM IST
London: Britain’s top share index retreated early on Monday, weighed on by weak commodity stocks as energy and metal prices fell, and as doubts crept back in about the extent and pace of the sharp rally since March.
By 0751 GMT the FTSE 100 was 0.6%, or 28.82 points lower at 4,982.65 after closing up 0.5% at 5,038.76 on Friday, its highest closing level since late September 2008.
The FTSE has so far rebounded 44% from the lows hit in March, but remains around 8% below levels prior to the collapse of US bank Lehman Brothers exactly a year ago.
Miners were weakened by falling metal prices as concerns on the demand outlook re-emerged. Rio Tinto, Xstrata, Lonmin, Anglo American, Kazakhmys and Fresnillo fell 1.3-2.5%.
“There’s weakness in metal prices and oils and miners are down ... certainly there are some jitters and investors are going back to safe havens,” said Richard Hunter, head of equities at Hargreaves Lansdown.
Oil lost more than 1% on Monday, falling toward $68 a barrel, hit by a rebound in the recently-hammered dollar and renewed concerns that oil prices may have run ahead of market fundamentals.
This hit energy stocks. BP, Royal Dutch Shell, BG Group, Tullow Oil and Cairn Energy fell between 0.3 and 0.9%.
Banks were also dented by a slight increase in risk aversion on the Lehman collapse anniversary.
Barclays, HSBC, Standard Chartered, Royal Bank of Scotland and Lloyds Banking Group fell 0.5 to 1.5%.
The UK blue-chip index’s weakness mirrored that on other major markets. US stocks broke a five-day winning streak on Friday, while Japan’s Nikkei average dropped 2.3% on Monday, and the FTSEurofirst 300 was down 0.8%.
Insurer Admiral was among a limited number of stocks in positive territory, up 0.7%. John Tiner, chief executive of Resolution, told the Times newspaper that in addition to current plans to pursue life assurers and asset managers, Resolution could buy a general insurer.
Cadbury, which has soared this month after it rejected a bid approach from Kraft, was also among the select band of gainers, up 0.8% on the possibility the US firm could go hostile.
A letter from Cadbury chief executive Roger Carr to Kraft chairman and CEO Irene Rosenfeld said that the Kraft takeover proposal fundamentally fails to reflect its current value.
Other defensive stocks Unilever, GlaxoSmithKline and Imperial Tobacco were also in positive territory, up 0.4-0.5%, as investors looked to shelter in relatively recession-proof equities.
In the absence of significant economic data on Monday, investors will look ahead to the August RICS UK house price survey, to be released overnight, and a batch of retailers’ first-half results due later in the week.
“In the absence of (strong) retail results from Debenhams, Kingfisher and Next, it’s hard to see where the next catalyst (for FTSE gains) is coming from,” Hunter at Hargreaves Lansdown said.
Comment E-mail Print Share
First Published: Mon, Sep 14 2009. 01 17 PM IST
More Topics: Markets | Britain | FTSE | Oil | Energy |