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FTSE falls as commodity stocks and Pearson drop

Published 27/07/2015, 15:30
© Reuters. A man walks under an electronic information board at the London Stock Exchange in the City of London
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By Sudip Kar-Gupta

LONDON (Reuters) - FTSE 100 fell on Monday, weighed down by falls in media group Pearson (LONDON:PSON) and commodity stocks, which pushed the market towards six-month lows reached last week.

The blue-chip FTSE 100 index was down 1.2 percent at 6,500.30 at 1421 GMT.

The FTSE, which retreated 1.1 percent on Friday as commodity shares slumped alongside metals prices, was on track for its fifth straight session of losses.

Pearson fell 5.2 percent, the worst performing FTSE 100 stock in percentage terms, after several brokers cut their price targets on the company, which also announced talks to sell its 50 percent stake in the Economist.

Fears for economic growth in China, the world's biggest metals and energy consumer, have hit mining stocks and oil prices, with commodity stocks accounting for more than 20 percent of the FTSE's market capitalisation.

Oil hit four-month lows on Monday after Chinese stock markets fell more than 8 percent. This in turn pushed down shares in BP (LONDON:BP) and Royal Dutch Shell (LONDON:RDSa). [O/R]

"The pressure on crude oil is taking its toll on the market, given its exposure to the sector. I don't see this downward pressure relenting for the time being," said Beaufort Securities sales trader Basil Petrides.

Merlin Entertainments was down 3.9 percent after a profit warning, having at one stage been 7.8 percent lower.

However, consumer goods maker Reckitt Benckiser rose 1.3 percent after increasing full-year net revenue and margin targets.

© Reuters. A man walks under an electronic information board at the London Stock Exchange in the City of London

The FTSE hit a record 7,122.74 points in April but is now nearly 10 percent below that high, and down 1 percent in the year to date.

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