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FTSE lags euro zone, pulled down by BHP and Aberdeen

Published 30/11/2015, 15:02
© Reuters. A man shelters under an umbrella as he walks past the London Stock Exchange
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By Alistair Smout

LONDON (Reuters) - The FTSE underperformed euro zone indexes on Monday, missing out on the benefit from a weak euro and hindered by falls in mining company BHP Billiton and Aberdeen Asset Management.

The FTSE 100 index was down 2.05 points, or flat in percentage terms, at 6,373.10 by 1447 GMT, lagging sharp gains in top euro zone shares.

The FTSE 100 is up 0.1 percent in November, and was just about set for a second straight month of gains. The Euro STOXX 50 (STOXX50E) is up 2.7 percent for the month.

The euro was under pressure ahead of the European Central Bank's meeting later this week, at which it is expected to extend stimulus measures. This boosted exporters and sent euro zone shares up nearly 1 percent.

"We've been roughly neutral on UK equities, which are underperforming the rest of the developed markets despite UK economic growth being among the strongest," said Alan Higgins, UK chief investment officer for Coutts.

"The significant overseas revenue of the biggest UK companies has probably been a drag on sentiment, given recent concerns about global growth."

A chief laggard this year have been mining shares, hindered by lingering concerns about the pace of economic growth in China, the world's top metals consumer.

BHP Billiton (L:BLT) led the sector lower again on Monday. It fell 2.8 percent after Brazil said it would seek 20 billion reais ($5.24 billion) in damages from BHP and Vale (N:VALE), the owners of iron ore miner Samarco. A dam owned by Samarco burst on Nov. 5, killing at least 13 people and dumping millions of tons of mud and waste in the Rio Doce valley.

Aberdeen Asset Management (L:ADN) fell 4.3 percent, the top faller, after it reported a 12.5 percent fall in its full-year assets under management, after nervous investors pulled money out of its emerging market equity funds.

"Our current assumption for September 2016 is for continued outflows ... given the comment in the outlook statement that management believe the current weakness (in emerging markets) may have some way to run," Shore Capital analyst Paul McGinnis said.

© Reuters. A man shelters under an umbrella as he walks past the London Stock Exchange

Among mid-cap companies, food products supplier Cranswick (L:CWK) rose 3.1 percent after reporting a 3.6 percent jump in its pre-tax profit in the first half of the year.

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