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Weaker commodity stocks drag FTSE down from highs

Published 14/11/2014, 09:18
© Reuters A man walks past the London Stock Exchange in the City of London
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By Atul Prakash

LONDON (Reuters) - The top share index retreated from a six-week high on Friday, with commodity stocks losing ground following a further drop in prices of crude oil and industrial metals.

The UK mining index fell 1.6 percent, the biggest sectoral decliner, after copper prices slipped and were on track for their biggest weekly loss since September. Miners Rio Tinto, BHP Billiton and Randgold Resources dropped 1.6 to 2.3 percent.

The oil and gas index was down 0.7 percent, as Brent crude held near a four-year low just above $77 a barrel amid concerns over excess supply and uncertainty over whether OPEC would cut output at a meeting in two weeks.

"With global growth expectations being reduced, commodity prices will stay under pressure and mining and energy stocks will likely continue to weaken," John B Smith, senior fund manager at Brown Shipley, said.

"The FTSE 100 has had a rally of over 550 points since its low on Oct. 16. In the short term it looks overbought and will probably weaken. I doubt that the index can sustain its rise above 6,500 points."

The blue-chip FTSE 100 index was down 0.3 percent at 6,616.11 points by 0849 GMT. It closed 0.4 percent higher in the previous session after rising to its highest level since late September.

Among other sharp movers, Aggreko, the world's biggest temporary power provider, rose 4.2 percent after saying that trading since its interim results in August had been in line with its expectations and underlying group revenue in the third quarter was 6 percent ahead of the same period last year.

British engineering company IMI fell 1.4 percent after reporting a revenue drop of 6 percent for the four months to the end of October and saying it would acquire Germany-based valve maker Bopp & Reuther Holding GmbH for an enterprise value of 152.6 million euros ($190 million).

© Reuters. A man walks past the London Stock Exchange in the City of London

Mid-cap company Premier Farnell, a distributor of small electronics and electronic parts, slipped 9 percent after warning full-year operating margins would be slightly below prior year levels as it experienced softer trading conditions in Asia and Europe.

(Reporting by Atul Prakash; Editing by Toby Chopra)

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