Britain's top share index ended little changed on Tuesday, with a rally in mining companies offseting a slump in BT Group after a profit warning by the telecoms business. The blue-chip FTSE 100 index, which touched a three-week low the previous day, had a volatile session after the UK Supreme Court ruled that Prime Minister Theresa May must gain parliament's approval before she begins Britain's formal exit from the European Union.
"The court ruling is a slap in the face of the British government. However, parliament is likely to give its approval and the Brexit timeline could remain on track," said Jawaid Afsar, senior trader at Securequity.
"As far as investors are concerned, one more uncertainty is now out of the way and they can focus on other things."
Basic resources stocks were in demand, with the UK mining index climbing 3.3 percent to its highest since late 2014 after the dollar traded near its lowest since early December on concerns that US President Donald Trump is more focused on protectionism than pro-growth economic policies.
Trump formally withdrew the United States from the Pacific Rim Trans-Pacific Partnership (TPP) on Monday, distancing the United States from its Asian allies.
A weaker dollar makes metals cheaper for holders of other currencies and boosts prices of key industrial metals. Anglo American, BHP Billiton, Antofagasta, Rio Tinto and Glencore were the top five gainers, rising by between 2 percent and 5.9 percent.
However, the index's advance was capped by a sharp fall in BT, which lost a fifth of its market value on Tuesday, hit by an Italian accounting scandal that has compounded a sudden slowdown in its British government work and forced the telecoms group to cut forecasts for the next two years.
Shares in the company tumbled by 20.8 percent to 303 pence by the close for its biggest ever one-day fall.
"The revelation that accounting deficiencies in Italy are worse than previously thought is a bitter and, needless to say, unwelcome pill to swallow for BT investors," said Hargreaves Lansdown analyst George Salmon.
"With news that its Business and Public Sector division is coming under pressure, too, worries about the group's ability to fund its generous dividend policy will surely grow."
Elsewhere, easyJet fell by 8.8 percent after the budget airline said that a weaker pound and higher fuel prices would hit profit more than expected this year.
Comments
Comments are closed.