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* FTSE 100 up 0.3 pct
* Miners drop ahead of Fed rate decision
* Standard Life falls after downgrade
By Kit Rees
LONDON, Dec 13 (Reuters) - Britain’s top share index rose on Tuesday, though gains were capped as commodities-related stocks stumbled ahead of the U.S. Federal Reserve’s meeting.
The blue chip FTSE 100 index was up 0.3 percent at 6,907.53 points by 0951 GMT, mirroring gains in the broader European market.
While the rally was broad-based, with ITV, International Consolidated Airlines and Burberry among top risers, miners were the biggest fallers.
Shares in Randgold Resources and Fresnillo dropped 1.9 percent and 2.5 percent respectively as the price of gold slipped ahead of the U.S. Federal Reserve’s interest rate decision on Wednesday. Investors are expecting a hike in interest rates for the first time in 2016.
Likewise a drop in the price of copper hit shares in Antofagasta, Rio Tinto, BHP Billiton and Glencore, which fell between 1.7 to 2.8 percent.
Commodities prices tend to come under pressure when real interest rates rise as investors put capital into higher-yielding assets.
“It is pretty much priced in by the market the we will see a hike in (U.S.) rates. This is likely to cause relative strength in the dollar and that is quite negative for commodities,” Jonathan Roy, advisory investment manager at Charles Hanover Investments, said.
“They’ve had quite a strong run, the miners of late, so if we see a strengthening dollar and a weakening commodity price in the face of a rate hike, that’s going to be slightly negative for the miners in the short-term.”
Insurer Standard Life was also among the top fallers, down 1.4 percent after Deutsche Bank cuts its rating on the stock to “hold” from “buy”, citing concerns about margin pressure and GARS outflows.
Among the mid caps, cyber security firm NCC Group fell more than 7 percent after the firm cut its 2017 EBITDA forecast, with analysts at Jefferies pointing to project cancellations as impacting profitability.
“These were substantial, high-margin projects that were also expected to yield considerable additional workloads for NCC during the course of the year. Hence, the pain inflicted by the cancellations, all for unrelated reasons, is disproportionately high,” analysts at Jefferies said in a note. (Reporting by Kit Rees; Editing by Angus MacSwan)