LONDON (Reuters) - UK shares dipped on Monday and were close to revisiting a three-month low as financial stocks fell on geopolitical jitters, though metal prices propped up the heavyweight mining sector.
The blue chip FTSE 100 .FTSE ended down 0.1 percent at 7,318.88 points, suffering its third straight session of losses, in line with a broader "risk-off" move among European bourses.
The financial sector has been hit particularly hard by a global move to dump risk assets as geopolitical tensions between the United States and North Korea have bubbled up over the past fortnight.
“Gains across the board for commodities are looking like the main driver,” Henry Croft, research analyst at Accendo Markets, said.
“It’s definitely the risk assets that do get hit when you see geopolitical tensions rise. Alongside that you have a mixed overview for British banks, what’s going to happen in the future - it’s looking less and less likely that we’re going to see a Bank of England rate hike,” Croft added.
Provident Financial (PFG.L), down 5.8 percent, was the biggest blue chip faller following a report in the Sunday Times that some hedge funds had built up short positions.
Shire (SHP.L) fell more than 4 percent after the drugmaker said its finance head will step down.
The sector was helped by a rise in metal prices, with copper up 1 percent and zinc hitting its highest in a decade as investors piled into metals used by China’s steel sector. [MET/L]
British Land Company’s (BLND.L) shares declined 0.9 percent, under pressure after broker HSBC cut its rating on the real estate company to “hold” from “buy”.
“The large UK-proxy property companies are particularly prone to UK-centric economic and political events, which has evidently left them devoid of any re-rating impetus, underscored by a declining UK GDP growth trajectory,” analysts at HSBC said in a note.
Reporting by Kit Rees; Editing by Mark Potter and Pritha Sarkar