FTSE hits two-week low as pound strengthens
THE FTSE 100 dipped to its lowest for two weeks as it was impacted by weaker mining and housing stocks, as well as the stronger pound.
London’s top mining firms, including Antofagasta and Glencore, suffered significant drops as they were knocked by another slump in metal prices, which particularly affected copper.
Chris Beauchamp, chief market analyst at IG, said: “The UK’S inflation reading will steal the headlines today but it is the sharp drop in copper prices that is driving the losses for the FTSE 100.
“Miners are down across the board as copper suffers its worst day so far this year. Investment funds have piled in over the past few months, and have done well, but profit-taking is finally making itself felt.”
The FTSE 100 finished 46.12 points, or 0.55%, lower to end the day at 8,370.33.
The index also dropped as its multinational firms were hit by a rise in the value of the pound.
Sterling was lifted by the higher-than-expected UK inflation reading of 2.3% for April, which caused some economists to push predictions of a June interest rate cut back to August amid concerns over persistent services price increases.
The pound was up 0.19% at 1.273 US dollars and was up 0.38% at 1.175 euros at market close in London.
Elsewhere in Europe, the other main markets were lower after taking their cues from early weakness in London. The German Dax index was down 0.24% at the close and the Cac 40 in France ended down 0.61%. Stateside, the S&P 500 had a choppy start and edged slightly lower as traders chose to sell off following its record high on Tuesday.
Water giant Severn
Trent was also in the green at the end of trading after its profits rose by around a fifth last year and increased its dividend to shareholders.
Shares in the firm were 1% higher at 2,639p at the close after it struck a profit of £201 million for last year, despite also witnessing a jump in sewage spills.
Mitchells & Butlers investors toasted bumper profits for the pub and bar owner on Wednesday as it benefited from easing inflation and cost efficiency efforts.
The All Bar One and Toby Carvery owner saw shares rise by 10% to 292.5p after it recorded a pre-tax profit of £108 million for the 28 weeks to April 13, up from £40 million for the same period a year earlier.
The biggest risers on the FTSE 100 were Marks & Spencer, up 14.2p to 288p, DS Smith, up 9.6p to 376.8p, B&M European, up 13.6p to 554.8p, Auto Trader, up 14.8p to 741.4p, and GSK, up 32.5p to 1,788.5p.
The biggest fallers on the FTSE 100 were Antofagasta, down 154p to 2,256p, Glencore, down 16.9p to 483p, Ocado, down 11.5p to 343.5p, Barclays, down 6.1p to 211.45p, and St James’s Place, down 12.2p to 465.8p.