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FTSE down for fourth day on weaker miners, Tesco
April 17, 2013 / 12:00 PM / in 4 years

FTSE down for fourth day on weaker miners, Tesco

* FTSE 100 index falls 0.7 percent

* Miners, oils down on growth concerns

* Tesco slips on plan of huge write-off

* Tullow, Wessex drop on exploration update

By Atul Prakash

LONDON, April 17 (Reuters) - Britain’s top share index extended losses for a fourth straight session on Wednesday, with economic worries weakening commodity stocks while Tesco dropped after confirming it would take a large write-off.

Charts pointed to further declines for the blue chip FTSE 100 index, which fell 43.10 points, or 0.7 percent, to 6,260.18 by 1133 GMT, its lowest in nearly two weeks.

“The risk is skewed to the downside. With commodity prices pushing lower, we are looking for a downturn through April and May,” Lynnden Branigan, analyst at Barclays Capital, said.

“There is a fair chance for the index to head towards the 6,000 area, around which you might see a stopping point for most of the people.”

Major energy and mining stocks took almost 30 points off, while other decliners were offset by gains in some defensive stocks such as tobacco, beverages and personal goods, up 0.5 to 3.4 percent.

The FTSE mining index fell 2.2 percent and the FTSE oil and gas index dropped 1.4 percent, with investors dumping the sectors in the past days after recent poor economic data from China and the United States sparked concerns about demand for commodities.

“People are using commodities as a big stick to beat the market, which just wants to come back to the lower levels of its trading range,” Bob Butler, head of trading at Westhouse Securities, said.

Mining and energy shares mirrored softer commodity prices, with copper falling 1.8 percent, oils dropping 0.9 percent and zinc down 0.8 percent.

Tesco, down 3.3 percent, also put pressure on the market, with Britain’s top retailer taking the most points off the FTSE 100 index after writing down the value of its global operations by $3.5 billion and announcing plans to exit the United States.


An exploration update hurt Tullow Oil, down 9.8 percent, Northern Petroleum, down 13 percent, and Wessex Exploration, down 24 percent.

Traders cited an update from the joint venture saying they extended the exploration of the offshore French Guiana well, potentially causing a delay in the programme.

Tullow’s trading volumes were 143 percent of its 90-day daily average, the tenth most traded stock in Europe.

On the positive side, luxury brand Burberry rose 3.4 percent after posting better-than-expected revenue, thanks to strong demand for its more expensive products in China.

“Burberry has again pleased, making earlier challenges look temporary in nature. As such, the share price has responded well, with the current consensus opinion of a strong hold potentially coming under upward pressure,” Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said.

“Nonetheless, with the company’s Asian bias increasing and the debate over Chinese economic growth still ongoing, room for caution appears to persist.” (Editing by Ruth Pitchford)

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