LONDON: Britain’s top share index fell back on Wednesday, weighed down by fresh weakness among miners and energy stocks, though investors cheered Sainsbury’s trading update.
The blue chip FTSE 100 index was down 0.2 percent at 7,581.34 points by 0904 GMT, slightly underperforming a flat to weakly-positive European stock market. Mid caps were down 0.4 percent.
A rise in the pound following better-than-expected UK service PMI data also weighed on the FTSE’s dollar-earnings constituents.
A fall across materials stocks weighed on the British index, with shares in Rio Tinto, BHP Billiton and Antofagasta trending 0.8 percent to 1.5 percent lower as underlying metals prices continued to struggle, hit by concerns over trade between the U.S. and China.
Likewise shares in big oil stocks BP and Royal Dutch Shell declined around 0.2 percent.
Trading more broadly has been choppy as a July 6 deadline looms, when the U.S. 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, shares in supermarket Sainsbury’s , popped 1.1 percent higher after the grocer gave an update on trading in its fiscal first quarter.
Though Sainsbury’s saw sales growth slow in its latest quarter, the 0.2 percent rise in retail like-for-like 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 a word of caution, however, for a sector which has struggled with a rise in inflation and a squeezed consumer.
“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 were the biggest gainers, up 3.7 percent on the back of a report of a possible bid for the miner’s South African business.
Among fallers, shares in Compass Group were down 1.4 percent the catering group said that its finance chief was leaving, the second key executive change at Compass this year.
Source: Brecorder
