LONDON (Reuters) - Britain's top share index hit a three-week low on Wednesday, with hotel operator Whitbread WTB.L falling on a raft of negative broker comments and Antofagasta ANTO.L dragging down miners after a disappointing earnings update.
The blue-chip FTSE 100 index .FTSE closed 0.9 percent lower after falling to its lowest level since Oct. 3 earlier in the day. But it is still up about 11 percent so far this year.
Whitbread fell 4.6 percent, the top faller in the FTSE 100 index, after Deutsche Bank, Kepler Cheuvreux, Credit Suisse and Canaccord Genuity all cut their price targets for the stock, one day after it reported a slowdown in sales growth.
“We believe Whitbread’s new CEO is taking the right actions – chasing down efficiencies, investing where needed, focusing on scale opportunities internationally – but the market backdrop is tough,” UBS analysts said, adding that they had cut their 2018 earnings per share estimate for the company by 5 percent.
Basic resources stocks were on the back foot, with the UK mining index .FTNMX1770 down 1.4 percent, pressured by a 3.2 percent fall in Antofagasta after the company said it saw output for this year coming in at the lower end of its previous guidance. It also forecast lower output for 2017.
“Equity indices are lower across the board, with the decline in commodities taking its toll. Even without the decline in commodity prices, these indices continue to look toppy at the moment,” OANDA analyst Craig Erlam said.
“While we may be well supported for now, this is not a set up that is indicative of a market that’s about to tear higher. Especially not against the fundamental backdrop of mediocre earnings and a Fed rate hike.”
Among some standout gainers, IAG ICAG.L was up 5.2 percent, the top FTSE 100 riser, after British Airways agreed to pay 300 million pounds ($367 million) per year into its pension scheme, plus top-ups, under a new plan which leaves room for the airline to pay dividends to owner IAG.
Tesco TSCO.L and Sainsbury SBRY.L gained 1.6 percent and 1.3 percent respectively after Goldman Sachs raised its target prices on both the stocks. However, it said that British supermarkets did not offer reward for risk in the context of steep inflation.
Editing by Robin Pomeroy
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