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Europe: FTSE 100 breaks 9-day winning streak as miners, British Land fall

Thursday, May 18, 2017 - 06:58

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Britain's top share index snapped a nine-day gaining streak on Wednesday, turning lower as US political developments weighed on European equity markets, with mining stocks and banks the biggest sectoral drags.

[LONDON] Britain's top share index snapped a nine-day gaining streak on Wednesday, turning lower as US political developments weighed on European equity markets, with mining stocks and banks the biggest sectoral drags.

After spending the majority of the session in flat to slightly positive territory, British blue chips turned lower, in step with the broader equity market after reports about a leaked memo by former FBI chief James Comey brought political worries into focus.

The blue chip FTSE 100 index was down 0.25 per cent at 7,503.47 points at its close, sliding from a record high hit in the previous session, though the FTSE's fall was tempered by strength among energy stocks and precious metals miners.

"The political uncertainty in (Washington) DC has given traders the perfect excuse to bank the previous day's profits,"David Madden, market analyst at CMC Markets UK, said. "London's relatively high exposure to commodity related companies has ensured that the sell-off hasn't been that severe."

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Shares in CRH and Ashtead were among the biggest fallers, while results weighed on British Land, which fell 3.3 per cent - its biggest one-day loss in four months - after issuing a cautious outlook for the property market due to Brexit uncertainty.

Peers Land Securities Group and Intu Properties also fell.

Among miners, Glencore and Anglo American were down 2.2 per cent and 1.1 per cent respectively.

There were a few bright spots, however, with banking stock Lloyds rising 2 per cent after the British government sold off its remaining stake in the lender following its bailout in the 2007-09 global financial crisis.

Investment platform provider Hargreaves Lansdown was also a top gainer, up 1.7 per cent and recovering some of its losses from the previous session.

Its shares tumbled 8.5 per cent on Tuesday, with traders pointing to an announcement from ETF provider Vanguard about plans to sell directly to investors in Europe for the first time.

"The HL business model has proved itself to be incredibly resilient in the face of a couple of major headwinds in recent years," Shore Capital analyst Paul McGinnis said in a note.

"We would be a lot more nervous around the implications of the Vanguard platform for the fledgling robo-advice sector." Precious metals miner Randgold Resources was also in demand as the price of gold rose.

Broker action lifted shares in Kingfisher, which was up 2 per cent after HSBC raised its recommendation on the stock to "buy" from "hold".

A Jefferies downgrade to "underperform" from "buy" weighed on pharma stock Hikma, which dropped 2.8 per cent.

Jefferies equity analyst James Vane-Tempest cited the recent delay in US approval for Hikma's generic drug Advair.

Outside of the blue chips, well-received full-year results from Sophos helped the network security firm hit a new lifetime high, up 6.9 per cent.

The stock has been in demand following a global "ransomware"attack, boosting shares in cyber security firms.

REUTERS

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