LONDON: Britain's blue-chip share index edged lower on Wednesday, with mining and energy stocks losing ground again on lingering concerns that metals and oil prices will stay under pressure due to ample supplies and low demand.
Royal Bank of Scotland fell 3.4 percent after saying it would take a 2.5 billion pound ($3.6 billion) hit to its fourth-quarter profits after setting aside more cash to cover litigation costs, compensation for mis-selling loan insurance and an impairment charge at its private bank.
The UK oil and gas index fell 1.3 percent after oil prices headed back towards $30 a barrel on profit-taking, a bigger-than-expected buildup in U.S. crude inventory and worries about the pace of economic growth in China, the world's second-largest oil consumer.
The mining index fell 1.4 percent as copper prices dropped. Shares in BHP Billiton, Antofagasta , Anglo American and BP dropped 1 to 3 percent.
"It is becoming clear that equities have now become even more strongly correlated to commodity prices. Commodities stocks are expected to remain under selling pressure as the weakness in metals and oil prices is not seen disappearing soon," said Jawaid Afsar, senior trader at Securequity.
The benchmark FTSE 100 index fell 0.3 percent to 5,890.91 points by 0932 GMT. The index has fallen more than 5 percent so far this year.
However, some companies advanced following their updates.
Sage shares rose 5.6 percent, the top riser in the FTSE 100 index, after the software company said its business remained on track. The group said its group organic revenue increased by 6.6 percent for the first three months of the year.
Aberdeen Asset Management rose 2 percent after the company said funds under management rose 2.4 percent quarter on quarter to 290.6 billion pounds ($416.4 billion), boosted by market and currency gains. However, it saw more clients pulling cash from its funds in the December quarter due to concerns around economic growth.
"Solace is being sought in the slight rise in Assets Under Management, a slowing in net outflows and identification of further cost savings for 2016-17," Mike van Dulken, head of research at Accendo Markets, said.
Comments
Comments are closed for this article.