LONDON: Britain's top share index fell on Thursday to end a four-day winning streak, led lower by major mining stocks and hit by growing concern over the potential impact of Britain's exit from the European Union.
The FTSE 100 index retreated 0.2 percent to 6,020.11 points, underperforming the broader European market. Mining stocks, which had rebounded recently, were among the worst performers.
In a note sent to press on Thursday, Pacific Investment Management Co, whose flagship fund alone manages $90 billion in assets, said it saw a 40 percent chance of 'Brexit' at a referendum planned for later this year.
British Prime Minister David Cameron is set to hold 'now or never' talks on Thursday to keep Britain in the European Union, with the bloc's leaders suggesting there are only a few obstacles left to a new membership deal.
"Where the two sides act as if in an unpleasant divorce ... the market response could be more long-lasting, with obvious pressure on the British pound and large UK listed companies with significant European activities," PIMCO portfolio manager Mike Amey said in a note.
Miners pulled the index lower, with Anglo American, whose shares surged 17.6 percent on Wednesday, dropped 3.8 percent as Standard & Poor's downgraded its credit rating to junk, the third agency to do so this week.
The FTSE 350 Mining Index remains up by around 10 percent so far in 2016, although it fell 50 percent in 2015.
Many investors remain concerned about the impact on mining and energy shares of a slowdown in China, a leading consumer of commodities.
China's consumer inflation quickened to a five-month high in January as food prices rose, but producer prices fell for a 47th straight month as declines by commodities and weak demand put deflationary pressure on the world's second-largest economy .
"Investors must remember that oil prices are still painfully low, while concerns over the global economy remain elevated, which should weigh heavily on sentiment," said FXTM research analyst Lukman Otunuga.
Shares in British Gas owner Centrica rose nearly 5 percent as some analysts welcomed plans by the company to trim back its investments and costs.
However, Tullow Oil - a member of the FTSE 250 mid-cap index - fell 6.6 percent after reporting technical issues on one of its sites in offshore Ghana.
The FTSE 100 remains down around 3.6 percent since the start of 2016, and 15.5 percent below its April 2015 record high.
Comments
Comments are closed for this article.