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FTSE hit by weak mining stocks, gloomy BOJ view

LONDON (Reuters) - A drop in the shares of major mining companies and a gloomy economic outlook from the Bank of Japan pulled Britain’s top equity index lower on Tuesday.

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The blue-chip FTSE 100 was down 0.6 percent at 6,139.97 points by its close, slightly outperforming the broader European market.

Investors also said an opinion poll giving the “Out” campaign a 2 percentage point lead ahead of Britain’s June 23 referendum on European Union membership was hurting sentiment.

The FTSE is down by around 2 percent since the start of 2016 and almost 14 percent below its record high in April 2015. World stock markets have slumped over that period due to concerns about a global economic slowdown.

Asian stocks fell after the Bank of Japan offered a bleaker view on the economy while keeping its monetary policy steady.

The BOJ also dropped references to taking rates further into negative territory, six weeks after taking an initial, radical shift in that direction.

“Fears still linger over central banks running out of ammunition to jump-start global growth, while China’s woes periodically sour risk appetite,” said FXTM research analyst Lukman Otunuga.

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Concerns about a slowdown in China, the world’s second-biggest economy and a major commodities consumer, have hit metals and oil prices.

Miners such as Anglo American and BHP Billiton sagged on Tuesday as copper prices weakened, while shares in Antofagasta fell 4.5 percent after being hit by the cancellation of Antofagasta’s final dividend.

Among mid-caps, oil producer Tullow Oil slid over 11 percent after declaring a force majeure on two cargoes of oil from Ghana following an issue on the Floating Production Storage and Offloading (FPSO) facility that exports the oil.

British insurer Legal & General was also among the top fallers on the FTSE 100, dropping 6.4 percent on a weaker solvency ratio despite reporting broadly strong results.

Royal Bank of Scotland managed to outperform, however, advancing 1.5 percent after Goldman Sachs upgraded RBS to “buy” from “neutral”.

Editing by Mark Heinrich

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