(ADVISORY- Follow European and UK stock markets in real time on
the Reuters Live Markets blog on Eikon, see cpurl://apps.cp./cms/?pageId=livemarkets)
* FTSE 100 down 0.2 pct
* Precious metals miners slump
* Banks rally after Fed rate hike
* Centrica jumps after lifting earnings
By Kit Rees
LONDON, Dec 15 UK shares retreated on Thursday,
hit by a fall among mining companies after the U.S. Federal
Reserve raised interest rates, though shares in banking stocks
and Centrica rallied.
The blue chip FTSE 100 index was down 0.2 percent at
6,935.65 points by 1009 GMT, underperforming the broader rally
across European markets which was underpinned by gains in the
The U.S. Federal Reserve hiked interest rates by 25 basis
points on Wednesday and signaled an accelerated pace of
increases in 2017.
The move weighed on shares of precious metals miners
Fresnillo and Randgold Resources, the biggest
fallers on the blue chip index, down 8.7 percent and 6.9 percent
respectively after the price of gold fell to its lowest in over
10 months, hit by a firmer dollar.
Similarly shares in miners Antofagasta, BHP
Billiton, Anglo American and Glencore
came under pressure from dollar strength, which makes the cost
of greenback-denominated underlying commodities more expensive
to holders of foreign currency.
UK banks, however, rose, with the FTSE 350 banking index
up 0.7 percent, with Royal Bank of Scotland
and Barclays the biggest risers, both up more than 2
A U.S. rate rise is considered a positive for banks, which
have struggled in a low-rate environment.
"Rising interest rates are generally quite good for banks,
depending on their specific situation, but in general they are
sitting on large deposit bases and they can make a bigger spread
as interest rates go up," Simon Gergel, CIO of UK Equities at
Centrica was the biggest riser on the blue chip
index, gaining 5.5 percent and touching a 2-month high after the
utility lifted its full-year guidance on better-than-expected
cost savings and a strong trading performance in a volatile
Among the midcaps, Just Eat advanced 1.9 percent to
hit an all-time high after agreeing to buy its main UK rival
hungryhouse, an online food company, for an initial
consideration of 200 million pounds.
The online food delivery company also agreed to buy
SkipTheDishes in Canada.
"Intuitively, we are positive on the transaction,
consolidation is a good thing in online marketplace models
whatever the vertical, this deal not only consolidates the UK
effectively, it also removes the possibility of a more radical
combination for HH (hungryhouse)," analysts at Jefferies said in
(Reporting by Kit Rees; Editing by Janet Lawrence)