Economic news

FTSE 100 Flat as Mining Stocks Negate Defensive Gains

London’s FTSE 100 was flat on Thursday as weakness in mining and energy stocks countered gains in defensive sectors such as consumer staples and utilities, while Cineworld dropped after reporting an annual loss.

The blue-chip FTSE 100 index was unchanged, with miners including Rio Tinto, Anglo American and BHP being the biggest drags.

Consumer staples including Unilever Plc and Diageo Plc were the biggest boost to the index.

“There is an air of caution for stocks, not only in UK but across Europe as well, because today is the EU summit. It will discuss, among other things, whether to ban exports of vaccines, which should have a significant impact on the UK vaccine rollout,” said Connor Campbell, an analyst at Spreadex.

“Also, in the longer term, this kind of an event could further set the tone of UK’s relationship with the EU post-Brexit. So, there’s more at stake than just vaccine exports essentially.”

The FTSE 100 and the mid-cap FTSE 250 indexes have recovered more than 36% and 72%, respectively, from a coronavirus-driven crash last year as investors bet on a vaccine-led economic rebound. But a recent rise in coronavirus cases has dampened sentiment.

Bank of England Chief Economist Andy Haldane said he remained confident that Britain’s economy was poised for a quick bounce-back as the country races ahead with its coronavirus vaccinations and restrictions are lifted.

The domestically focused mid-cap FTSE 250 fell 0.2%, weighed down by consumer discretionary stocks.

Cineworld fell 10.7% to the bottom of the mid-cap index, after saying it plans to ask shareholders to approve a raise in its debt ceiling next month to allow it to borrow more money to shore up its shattered finances, following a $3 billion loss in 2020.

Catering firm Compass Group rose 1.3%, after forecasting better margins in the second quarter than in the first as it trimmed costs to cope with an expected hit to revenue from most schools and offices remaining shut.

(Reporting by Shivani Kumaresan in Bengaluru; Editing by Subhranshu Sahu)

Source: Reuters

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