LONDON (Reuters) - Britain’s blue-chip share index slipped on Monday, with a drop in mining shares on the back of a fall in metals prices and weaker financial stocks putting pressure on the broader market.
Kingfisher KGF.L, Europe's largest home improvement retailer, fell 6 percent as investors reacted negatively to the cost of a plan to boost its profit. The plan will cost 800 million pounds over the next five years to deliver.
The benchmark FTSE 100 index .FTSE closed 0.4 percent lower at 5,877.00 points, having gained earlier in the session and rallied at the tail-end of last week to post its first weekly rise of 2016.
“Oversupply commodities is a key factor in market movements at the moment. The general malaise in the market is affecting all stocks,” Laith Khalaf, senior analyst at Hargreaves Lansdown, said.
“The deflationary effect of lower commodity prices also means a delay to interest rate rises,” he said adding a rate hike could have improved margins of banks.
UK financial stocks were also under pressure, led lower by Lloyds Bank LLOY.L, which fell 5.6 percent after JP Morgan cut its target price for the stock.
Analysts said the markets could continue to struggle to make significant gains in the near term.
“Fundamentally, the situation is no different to how it was a number of weeks ago,” said Brenda Kelly, head analyst at London Capital Group.
“The FTSE, having initially started proceedings oscillating the 5,900 level has already begun to falter, with the materials sector providing what has become a fairly habitual drag on the UK benchmark.”
Additional reporting by Atul Prakash; Editing by Alison Williams
Our Standards: The Thomson Reuters Trust Principles.