June's AI-picked stock updates now live. See what's new in Tech Titans, up 28.5% year to date.Unlock Stocks

FTSE drops 2 pct; miners, banks under pressure

Published 08/17/2009, 07:21 AM
UK100
-
BARC
-
NWG
-
TTEF
-
FMG
-
XTA
-
HRGV
-
RIO
-
AAL
-
AV
-
ANTO
-
STAN
-
LMI
-
TGT
-
SI
-

* Sentiment hit by weak U.S. consumer confidence on Friday

* Japan's GDP figures disappoint some investors

* Miners, banks hardest hit

By Tricia Wright

LONDON, Aug 17 (Reuters) - Britain's top share index fell 2 percent in midday trade on Monday amid concerns over the pace of global recovery, after unexpectedly weak U.S. consumer confidence data on Friday, and as Japan's GDP figures disappointed some investors.

By 1101 GMT, the FTSE 100 was down 92.66 points at 4,621.31, extending losses from Friday when the index shed 0.9 percent.

"We're seeing a little bit of follow-through from the U.S. consumer confidence figures on Friday that saw the market weaken," said Keith Bowman, analyst at Hargreaves Lansdown.

U.S. stocks looked set for further falls on Monday, with index futures,, all down around 2 percent, reflecting the fresh declines in Europe and Asia.

"Although we did see an improvement in GDP figures in Japan, that was a little bit below expectation, so that's also taken away a little bit from sentiment," said Bowman.

Data showed Japanese gross domestic product grew 0.9 percent in April-June, slightly short of a median market forecast of a 1.0 percent increase..

Miners took the most points off the index on demand concerns sparked by worries over economic recovery, with Rio Tinto, Kazakhmys, Antofagasta and Lonmin down between 4.4 percent and 5.5 percent.

The China Iron and Steel Association (CISA) said it would negotiate with the three top iron ore miners using a price it agreed with Australian miner Fortescue Metals Group as a reference.

However, Australia's largest miner Rio Tinto said it does not see a price pact between Fortescue Metals and China's largest steelmaker Baosteel as establishing an industry-wide price.

Xstrata was the top blue chip faller, down 5.8 percent with the miner reported to have redoubled its attempt to win over the investors of its rival and merger target Anglo American, the Guardian newspaper said on Monday.

Anglo American shares shed 5.5 percent.

Fresnillo shed 2.6 percent after the world's largest primary silver producer posted a 14 percent decline in first-half profit due to lower silver prices, but remained positive for the full year.

Banks were also lower as investors cut back on risky positions. HSBC, Lloyds Banking Group and Standard Chartered were down between 2.1 and 3.3 percent.

Royal Bank of Scotland shed 2.6 percent after the lender said Britain's financial regulator has launched a supervisory review of the Scottish bank's takeover of ABN Amro.

Barclays was down 3.3 percent. Barclays is attempting to recruit five JP Morgan investment bankers with a bonus package worth a total of 30 million pounds ($49.16 million), the Sunday Telegraph reported, without citing sources.

SOLE BLUE CHIP GAINER

Aviva was the only blue chip riser at midday, up 1.9 percent after HSBC upgraded the insurer to "neutral" from "underweight" and raised its price target to 400 pence from 320 pence.

Domestic economic news was thin on the ground.

Asking prices for homes in England and Wales are on average 3.1 percent lower this month than a year ago, property web site Rightmove said.

That matched July's annual fall, but a monthly decline of 2.2 percent this month more than reversed July's 0.6 percent rise from June, leaving the average price of a home at 222,767 pounds.

Britain's economy should return to growth in the second half of 2009, although the speed of recovery will depend on the effect of bank lending constraints and the state of the global economy, BoE policymaker Andrew Sentance said in an article for the Sunday Times newspaper

Investors were looking ahead to the afternoon release of the U.S. Empire State index for August, which is expected to rise to 1.00, up from -0.55 in July.

The U.S. NAHB housing market index for August is also due later on Monday, with economists expecting a reading of 18, up from 17 in July. (Editing by Rupert Winchester)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.