FTSE 100 off multi-month peak on China stimulus policy concerns
(Reuters) – Britain’s main equities index moved away from a near seven-month high as oil majors weakened amid signs that global markets remain adequately supplied, while miners were hit by concerns China will reduce its economic stimulus.
The FTSE-100 index was down 0.6 percent at 0810 GMT, underperforming its European counterparts, and the midcaps were down 0.1 percent.
Oil majors Shell and BP dropped from multi-month highs as crude prices retreated after having jumped to their 2019 highs this week as the United States pushed to tighten sanctions against Iran.
Both bellwether stocks were on course for their biggest one-day drop in over a month.
Mining shares fell 1.4 percent as the price of industrial metals dropped in Shanghai. Concern is growing that China, the world’s biggest metals consumer, will ease up on its economic stimulus efforts, reducing demand.
Losses on the FTSE 100 were led by Anglo American, which fell nearly 3 percent after JP Morgan cut its rating on the stock.
Sainsbury’s gave up 1.4 percent. Britain’s competition regulator is expected to publish its final report on the supermarket group’s planned takeover of Walmart-owned rival Asda on Thursday.
All but two sectors were trading in the red on the index, placing it on course for its worst day in a month.
A bright spot, though, was Associated British Foods, which added 2 percent after its first-half results showed profit at its Primark chain jumped thanks to an expansion drive.
“Despite having no online presence, Primark has shown that there is money to be made in the retail sector if your know your market and maintain control of your costs and inventory,” said CMC Markets analyst Michael Hewson.
Online fashion retailer Boohoo advanced 3 percent as its strong profit numbers bucked the trend in a tough market for clothing retailers.
Precious metals miner Centamin leapt 8 percent, helping contain losses on the midcap bourse, as its first-quarter production beat the company’s forecast.
Saga rose 5 percent after JP Morgan said the motor insurer had reset expectations with recent results and upgraded its rating on the stock. The brokerage also raised its rating on insurer Hastings, which gained 2.4 percent.
But their larger rival, Direct Line, lost 1 percent on the FTSE 100 after JP Morgan lowered its rating to “neutral” from “overweight”.
(Reporting by Muvija M and Shashwat Awasthi in Bengaluru; Editing by Larry King and Mark Potter)