LONDON: London’s FTSE 100 pared losses to end flat on Wednesday as gains in cyclical and energy stocks countered underwhelming production updates from mining companies, while gains in airline stocks and brick maker Ibstock helped the midcap index stay afloat.
The blue-chip index ended flat, with consumer staple names Unilever, Diageo, British American Tobacco and oil majors Shell and BP among top gainers.
Countering them, mining stocks fell 5.1%, led by a 8.8% decline in Anglo American after the company lowered its production outlook due to inflation.
“The earnings season is probably the focus at the minute,” said Ian Williams, economist and strategist at Peel Hunt.
“With wage costs and raw material costs going up as well as supply chain disruptions ... the risk to earnings forecast is very much from the cost line rather than the revenue line.” BHP Group fell 2.5% after the world’s largest listed miner reported weaker-than-expected iron ore production for the March quarter due to a pandemic-related labour crunch.
Antofagasta lost 7.1% as the Chilean miner’s first-quarter copper production fell 24% year-on-year to 138,800 tonnes, hit by continued drought and lower grades.
Meanwhile, Bank of England interest rate-setter Catherine Mann said borrowing costs would probably have to rise further as consumer demand is unlikely to fall soon enough to stop businesses from pushing through price increases.
“We’re in a bit of a no man’s land currently waiting for more guidance on central bank monetary policy,” Williams said.
The domestically focused midcap FTSE 250 index rose 0.4%, with Wizz Air and easyJet climbing 4.4% and 4.9%, respectively, in the wake of an upbeat outlook from US peer United Airlines.
Ibstock jumped 8.8% as the company forecast full-year performance ahead of its expectations.
Pest control services provider Rentokil Initial gained 1.8% on strong current-quarter momentum.
Comments
Comments are closed.