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FTSE edges down, hit by Dixons Carphone slump
December 14, 2016 / 10:22 AM / a year ago

FTSE edges down, hit by Dixons Carphone slump

LONDON (Reuters) - Britain’s top share index dipped on Wednesday, dropping back from its highest close since October, pulled lower partly by Dixons Carphone (DC.L).

People walk through the lobby of the London Stock Exchange in London, Britain August 25, 2015. REUTERS/Suzanne Plunkett/File photo - RTSS1J0

The FTSE 100 .FTSE was down 19.38 points, or 0.3 percent, at 6,949.19 points at its close. It edged down from 6,968.57, which had been its highest close since Oct. 28.

Dixons Carphone (DC.L), Britain’s largest electricals and mobile phone retailer, was the top faller, down 6.6 percent after reporting results. They beat forecasts but the company said it was planning for tougher times.

Analysts said the results provided little reason to raise estimates and one trader flagged comments from the chairman that suppliers might raise prices as prompting the falls.

“The uncertainty is weighing, but also the fact that the pound has weakened significantly ... is clearly increasing the costs of the company,” said Ipek Ozkardeskaya, senior market analyst at London Capital Group, who added that the drop in the share price was nevertheless an overreaction

Traders said the index was also in a tight range ahead of the U.S. Federal Reserve’s decision on interest rates, which is due after the market closes.

Miners were on the back foot as copper dropped ahead of the decision, though precious metals miners Polymetal (POLYP.L) and Fresnillo (FRES.L) gained 6.4 percent and 3.5 percent respectively as the price of gold was supported by a softer dollar. [MET/L] [GOL]

The FTSE 250 .FTMC mid-cap index, which has higher domestic exposure, slightly underperformed the blue chips.

British households are currently feeling the least financial pressure since May 2015, buoyed by the economy’s solid performance since June’s Brexit vote, but they are increasingly worried about higher inflation next year, a survey showed on Wednesday.

In a similarly mixed update on the state of the UK economy, the number of people in work in Britain fell for the first time in more than a year in the three months to October, official data showed on Wednesday, but wages rose.

“We remain pessimistic about both consumption and investment as the UK economy heads into 2017,” analysts at UBS said in a note.

“(We) reiterate our view that further monetary easing during the course of next year is likely to be required to ensure the loss of economic momentum is cushioned.”

Among FTSE 100 risers, Micro Focus (MCRO.L) rose 4.2 percent and posted its biggest rise in three months after results beat expectations.

Reporting by Alistair Smout and Kit Rees; Editing by Gareth Jones

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