LONDON Jan 10 Mining companies' influence on
Britain's FTSE is fading after a tough year for the sector,
although it still has a greater bearing on the UK blue chip
index than on any other in Europe.
UK-listed miners have operations from Kazakhstan to Chile
and meet demand for commodities in China and the United States,
contributing to the FTSE's large international exposure.
While investors often use the FTSE 100 to bet on
prospects for global rather than UK growth, the basic resources
sector now has just the fifth biggest weighting in the FTSE 100
, down from third at the start of 2013.
UK listed miners fell 16.4 percent last year,
more than any other sector, and were overtaken by telecoms and
health care in terms of weighting on the FTSE 100.
Miners Vedanta, Polymetal, Kazakhmys
and ENRC, as well as steelmaker Evraz,
were all relegated from the FTSE 100 into the mid-cap FTSE 250
last year as their market capitalisation fell.
Basic resources stocks' weighting on the FTSE 100 is 8.1
percent, down from more than 10 percent in February 2013.
However, this give miners a much bigger weighting on the
FTSE than on other European indices, either national or
pan-continental. Basic resources stocks make up just 3.33
percent of the weighting on the STOXX 600 index.
"The weakness in miners last year both contributed to
relative underperformance in the FTSE as well as making its
weighting fall," said Jeremy Batstone-Carr, analyst at Charles
But he added: "It's still going to be quite a significant
swing factor (for the FTSE) even though its weighting has
While four FTSE sectors are bigger than basic resources,
other European indexes offer bigger exposure to each of those.
Investors wishing to invest in telecoms would get higher
exposure by buying Spain's IBEX, while Italy's FTSE MIB
has marginally more exposure to oil and gas.
The IBEX and FTSE MIB are more heavily weighted than the
FTSE in banks, and despite London's heavyweight pharma listings
such as GlaxoSmithKline, the French CAC offers
more exposure to health care through firms such as Sanofi
(Reporting by Alistair Smout, editing by Nigel Stephenson/Ruth