LONDON MARKETS: FTSE 100 Posts A Loss As Glencore Leads Miners Lower
August 24 2016 - 12:22PM
Dow Jones News
By Sara Sjolin and Carla Mozee, MarketWatch
Advertising giant WPP rallies after results; housing shares
rise
U.K. stocks closed in the red 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 0.5% to finish at 6,835.78, partly erasing
a 0.6% gain from Tuesday.
A 1.9% rise in shares of WPP PLC (WPP.LN) helped limit losses
for the benchmark, 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 3.1% 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 dropped 1.6%,
while silver lost 2%.
Shares of Anglo American PLC (AAL.LN) fell 3.1%, Antofagasta PLC
(ANTO.LN) erased 3.9%, and BHP Billiton PLC (BLT.LN)
(BHP.AU)(BHP.AU) dropped 2.5%.
Oil companies were mixed as crude and Brent futures were down at
least 2%. Shares of Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) gave
up 0.8%, and BP PLC (BP.LN) (BP.LN) rose 0.1%.
Housing: 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 U.K.
housing market with any real confidence. However, early data is
relatively upbeat," he added.
Shares of Barratt Developments PLC (BDEV.LN) rose 2.9%, Berkeley
Group Holdings PLC (BKG.LN) moved up 2.7% and Persimmon PLC
(PSN.LN) advanced 2.2%.
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 3.3%, 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 $1.3234, 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
materialize," 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 12:07 ET (16:07 GMT)
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