LONDON: UK’s FTSE 100 fell on Thursday as oil and mining majors were hit by weaker commodity prices, while online gambling software developer Playtech jumped after receiving a third takeover bid in the past two months. The blue-chip FTSE 100 fell 0.2% in morning trade, with oil companies Royal Dutch Shell and BP shedding about 1% each as crude prices plunged to six-week lows after China said it was moving to release reserves.
Miners fell 0.9% after copper prices dropped to their lowest in more than a month. The FTSE 100 extended losses for a third day after a robust jobs report and data showing inflation at a 10-year high earlier this week heightened rate hike expectations.
“Mounting inflation has helped drag the index back as it raises the likelihood of a pre-Christmas rate rise, thereby boosting the pound,” said AJ Bell investment director Russ Mould. “When some 70% of its constituents’ earnings are derived from overseas, strength in sterling isn’t that helpful.”
Bogged down by supply chain problems and inflationary pressures, London’s FTSE 100 has struggled to perform as well as its European peers that have extended gains for their seventh day. Investors are awaiting October retail sales data on Friday to gauge if higher prices hurt consumer spending.
“We’ve been told consistently that we need to get our Christmas orders in early, and as a consequence of that, we might actually see a better-than-expected number the same way that we did in the USA,” said Michael Hewson, chief markets analyst at CMC Markets. Drugmaker GlaxoSmithKline declined 2.5% as it traded ex-dividend.
Royal Mail climbed 5% after the company said it would return 400 million pounds ($539.84 million) to shareholders and forecast higher annual earnings in its UK business. The domestically focussed mid-cap index advanced 0.3%, with Playtech adding 4.3% after a takeover bid from JKO Play Ltd.
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