March 3, 2017 / 10:26 AM / 3 years ago

FTSE slips as WPP, miners weigh

LONDON (Reuters) - Britain’s top share index retreated on Friday, weighed down by a raft of disappointing earnings updates as well as weakness in the mining sector.

FILE PHOTO:A worker shelters from the rain as he passes the London Stock Exchange in the City of London at lunchtime October 1, 2008. REUTERS/Toby Melville/File Photo

The blue chip FTSE 100 index was down 0.3 percent at 7,358.97 points by 1009 GMT, having hit a record high in the previous session. The index, however, was still on course to post its biggest weekly gain since mid-January, helped by fresh sterling weakness.

Weak earnings dampened the mood. WPP, the world’s largest advertising group, saw its shares drop more than 6 percent after the firm expressed concerns about the outlook for 2017, cutting its sales forecasts on the back of a bleak economic environment.

“This suggests a worrying continuation of what (WPP) terms a ‘tepid’ macro environment, clients ‘grinding it out in a highly competitive game’ and a cooling of positive tailwinds. Not really what investors want to hear when shares are just shy of all-time highs,” Mike van Dulken, head of research at Accendo Markets, said.

Britain’s mid caps also didn’t escape unscathed after shares in commercial laundry firm Berendsen tanked nearly 17 percent.

Berendsen, which was poised for its biggest one-day loss of all time, said that it expected performance in the first half of 2017 to be impacted by legacy operations in the UK.

British miners were also putting pressure on UK shares, as precious metals miners Fresnillo among the blue chips and mid caps Hochschild and Centamin all fell between 3.6 percent to 6.5 percent, tracking the price of gold lower. [GOL]

Gold prices fell on Friday ahead of a speech by U.S. Federal Reserve Chair Janet Yellen, with the possibility of an interest rate hike later in March helping the dollar make gains this week.

“The chances of a rate hike at the next Fed meeting have increased from 30 percent just a couple of weeks back to 90 percent, so there’s a lot more realisation that the U.S. could be raising rates that bit sooner,” Dafydd Davies, partner at Charles Hanover Investments, said.

“Of course (on) the FTSE 100 you’ve got a fair few mining stocks ... with the strong dollar that could actually affect demand for the products they’re pulling out of the ground.”

Reporting by Kit Rees; Editing by Toby Chopra

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