UKX FTSE 100 Index

By Sara Sjolin and Carla Mozee, MarketWatch

Advertising giant WPP rallies after results; housing shares rise

U.K. stocks slumped on Wednesday, with resource companies leading the charge south on the back of a slide in commodity prices and a mixed earnings report from mining giant Glencore PLC.

The FTSE 100 dropped 0.4% to 6,838.33, partly erasing a 0.6% gain from Tuesday.

A 4.1% rise in shares of WPP PLC (WPP.LN) was leading blue-chips higher, after the marketing and advertising company reported a rise in first-half sales (http://www.marketwatch.com/story/wpp-profit-plunges-56-even-as-sales-rise-2016-08-24) and confirmed its guidance for 2016.

Commodity blues: Glencore (GLEN.LN) (GLEN.LN) gave up 4.2% after posting a loss for the first half of the year (http://www.marketwatch.com/story/glencore-loss-narrows-even-as-revenue-falls-2016-08-24). But the mining company signaled that it's on track to significantly reduce its net debt by selling unwanted assets (http://www.wsj.com/articles/glencore-to-sell-stake-in-australia-mine-in-bid-to-cut-debt-pile-1472007935?mod=wsj_nview_latest) to weather the recent commodities turmoil.

Revenue fell 6% on year to $69.4 billion due to broadly lower commodity prices, as well as to lower copper, zinc, coal and oil production in the first half compared with the same period a year before.

Other miners were heading lower, tracking losses for all major metals as the dollar strengthened, hurting dollar-denominated commodity prices. Gold lost more than 1% and copper was off nearly 1%, while silver lost 2%.

Shares of Anglo American PLC (AAL.LN) fell 3.7%, Antofagasta PLC (ANTO.LN) erased 3.4%, and BHP Billiton PLC (BLT.LN) (BHP.AU)(BHP.AU) dropped 1.9%.

Oil companies were in the red as crude and Brent futures were down at least 1%. Shares of Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) gave up 0.6%, and BP PLC (BP.LN) (BP.LN) fell 0.3%.

Housing: But shares of home builders managed to hold to gains following figures on mortgage approvals in July. The British Bankers' Association said 37,662 loans for home purchases were granted last month, the lowest amount since January 2015.

Heightened uncertainty following the June 23 Brexit vote and the higher rate of stamp duty on second homes weighed on approvals in July, said Kallum Pickering, senior U.K. economist at Berenberg, in a note. However, approvals "remain far above the lows of the financial crisis...and the euro crisis," he said.

"So far, so good--market soft but no crash. With just one month's data, it is too early to call the outlook for the UK housing market with any real confidence. However, early data is relatively upbeat," he added.

Shares of Barratt Developments PLC (BDEV.LN) rose 2.7%, Berkeley Group Holdings PLC (BKG.LN) moved up 2.5% and Persimmon PLC (PSN.LN) advanced 2.4%.

Other movers: AstraZeneca PLC (AZN.LN)(AZN.LN) turned up 0.4%. The drugmaker said it has agreed to sell part of its antibiotics business to Pfizer Inc (http://www.marketwatch.com/story/astrazeneca-sells-antibiotics-assets-to-pfizer-2016-08-24).(PFE) for up to $1.575 billion plus royalties.

Hikma Pharmaceuticals PLC (HIK.LN) flipped lower by 2.3%, but had been up earlier after the drugmaker reiterated its full-year guidance (http://www.marketwatch.com/story/hikma-profit-falls-14-sticks-to-revenue-forecast-2016-08-24).

The pound was buying $1.3263, up from $1.3193 late Tuesday in New York.

"Sterling continues to rise as short positions are squeezed and the sudden economic shock many expect post-Brexit has failed to materialise," wrote James Ruddiman, director of forex advisory at Audere Solutions. But "we are still likely to see lower growth and more easing ahead of a difficult negotiation period with the EU," he said.

"The market has room higher but GBP/USD is likely to be capped at 1.3500 resistance," Ruddiman added.

(END) Dow Jones Newswires

August 24, 2016 10:42 ET (14:42 GMT)

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