LONDON (Reuters) - Britain’s top share index lost some ground on Wednesday, weighed down by weakness among miners and energy stocks, though investors cheered Sainsbury’s trading update.
The blue chip FTSE 100 .FTSE index closed down 0.3 percent at 7,569.31 points, slightly underperforming a roughly flat European market.
A rise in the pound following better-than-expected UK services PMI data also weighed on FTSE constituents that rely on dollar earnings.
Mining stocks weighed on the British index, with Rio Tinto (RIO.L), BHP Billiton (BLT.L) and Antofagasta 2.3 percent to 2.7 percent lower as underlying metals prices continued to struggle, hit by concerns over trade tensions between the United States and China.
Trading more broadly has been choppy before a July 6 deadline when the United States is set to impose tariffs on $34 billion worth of Chinese goods.
“With just two days to go until the U.S.-Sino trade war threats start to take effect, relations between the U.S. and China remain hostile, rattling investors,” analysts at London Capital Group said in a note.
Among standout gainers, supermarket Sainsbury’s (SBRY.L), rose about 3 percent after it gave an update on trading in its fiscal first quarter. Though sales growth slowed in its latest quarter, the 0.2 percent rise in like-for-like retail sales was ahead of analysts’ average forecasts.
“We know that consumers were in fine fettle in May, as the Royal Wedding and some good weather lifted spirits, and that’s helped Sainsbury’s to achieve a positive period of trading,” Laith Khalaf, senior analyst at Hargreaves Lansdown, said.
Khalaf had words of caution, however, for a sector which has struggled with a rise in inflation and squeezed consumers.
“Conditions remain challenging though, and while the top line is just about growing, Sainsbury’s efforts to lower prices mean that may not entirely feed through into profits,” added Khalaf.
Shares in Anglo American (AAL.L) were big gainers, up 2.1 percent on a report of a possible bid for the miner’s South African business.
Among fallers, Compass Group (CPG.L) was down 1.7 percent after the catering group said its finance chief was leaving, the second senior executive change at Compass this year.
Reporting by Kit Rees and Julien Ponthus; Editing by Matthew Mpoke Bigg and David Stamp