LONDON (Reuters) - The UK’s top share index fell on Wednesday as mining stocks lost ground, with earnings in focus as ITV and Informa issued updates.
Mining shares .FTNMX1770 fell 1.3 percent following Tuesday’s five percent rise as copper prices steadied. [MET/L]
Mining companies, along with other cyclical stocks, have come under pressure as the trade dispute between the United States and China has escalated.
The broader European market was also lower before a meeting between European Commission President Jean-Claude Juncker and U.S. President Donald Trump. The meeting will focus on trade tensions after the United States imposed tariffs on EU steel and aluminium.
“It was a strong start to the week yesterday and I think we’re back to looking at the potential negatives and people ... are taking risk off the table,” said Mike van Dulken, head of research at Accendo Markets.
A production update from Fresnillo also weighed on the sector, while Antofagasta (ANTO.L) edged up 0.6 percent after it reported a 6.1 percent increase in second-quarter copper production and a fall in costs.
Banks were another weak spot with HSBC (HSBA.L), down one percent, being the biggest drag to the FTSE.
Event organiser Informa (INF.L) saw its shares drop four percent after the company reported half-year results. Informa’s outlook suggested a slower pace of growth, Accendo Market’s van Dulken said.
Investors cheered ITV’s (ITV.L) half-year update, which sent its shares up as much as 2.5 percent higher before paring some gains to trade up 0.9 percent. The commercial broadcaster said that the World Cup and “Love Island” had contributed to an eight percent jump in revenue.
Broadcasters have struggled with the rise of online streaming services and volatile advertising revenue, but ITV’s shares have managed a 3.4 percent gain so far in 2018 following two years of losses.
British homebuilders also topped the index, with shares in Taylor Wimpey (TW.L), Barratt Developments (BDEV.L) and Persimmon (PSN.L) rising after Berenberg issued a supportive note on the sector. Its analysts said they thought that fears around the UK housebuilding were “overdone”.
“The macro outlook remains supportive; housing is still affordable in most regions of the UK; and, with the support of the government’s Help to Buy (HTB) scheme, we expect the new build sector to continue to outperform the wider market,” the analysts said.
Among mid caps, shares in Indivior (INDV.L) fell 7.7 percent after the drugmaker reported a second straight drop in quarterly profit and warned of a bigger-than-expected blow from the launch of a copycat of its best-selling opioid addiction treatment.
Reporting by Kit Rees, additional reporting by Danilo Masoni, Editing by Larry King and Stephen Powell