December 12, 2016 / 10:00 AM / 3 years ago

FTSE slips from highs as gold miners lose lustre

LONDON (Reuters) - Britain’s top share index slipped on Monday after gaining in the previous five sessions in a row, with outsourcing group Capita (CPI.L) extending its recent losses and precious metals miners tracking a fall in gold prices to 10-month lows.

People walk through the lobby of the London Stock Exchange in London, Britain August 25, 2015. REUTERS/Suzanne Plunkett/File photo

Capita (CPI.L) fell for a third straight day and closed 5.3 percent lower after a profit warning late last week and its decision to sell its asset management business left analysts questioning the British outsourcing group’s strategy.

Russian gold and silver miner Polymetal (POLYP.L) slumped 4.7 percent after RBC cut its rating on the stock to “sector perform” from “outperform” and as gold prices slipped to a 10-month low on expectations of a U.S. rate hike this week. [GOL/]

“Polymetal remains an industry-leading precious metals company ... However, with increasing gold price volatility, high levels of 2017 capex and a higher (free-cash flow) break even price than peers we downgrade to Sector Perform,” RBC said.

Fellow precious metals miners Randgold RRS.L and Fresnillo (FRES.L) fell 1.4 percent and 3.3 percent respectively.

The blue-chip FTSE 100 .FTSE touched a fresh one-month high in early deals, before surrendering gains and closing 0.9 percent lower.

Banks also slipped as some investors took profits after recent sharp gains. The sector index .FTNMX8350 was down 2.4 percent, dragged down by a 3.3 percent fall in HSBC (HSBA.L) and a 2.4 percent weaker Barclays (BARC.L).

Losses were capped by a 1.6 percent surge in the oil and gas index .FTNMX0530 after oil prices rose more than 6 percent to an 18-month high after OPEC and some of its rivals reached their first deal since 2001 to jointly reduce output to try to tackle global oversupply and boost prices. [O/R]

Oil majors Royal Dutch Shell (RDSa.L) both rose about 1.5 percent.

“The OPEC deal made two weeks ago hinged on the non-OPEC members also agreeing to cut production - many members of OPEC had stated that they would only agree to cut production on the basis the non-members also agreed,” said James Hughes, chief market analyst at GKFX.

“The agreement puts the issue of a global oil glut to rest, but only for now.”

Shares in Sky SKYB.L fell 2.8 percent after seeing a record gain of nearly 27 percent on Friday after a $14 billion takeover bid from Twenty-First Century Fox.

The stock pulled back as shareholders and analysts said the offer represented a “low-ball” bid, with one major shareholder set to reject the offer. Fellow broadcaster ITV (ITV.L) dropped 3.3 percent.

Additional reporting by Atul Prakash; Editing by Catherine Evans

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