Top UK stocks fell into negative territory late on Tuesday, weighed down by depressed mining stocks.
With markets closed for a holiday on Monday, the session began rangebound followed by light gains midsession and eventually ended lower. The blue-chip FTSE 100 index ended down 0.25% at 6,820.
Mining firms weighed on the market as the price of copper dropped to a 10-week low. The FTSE 100 top decliner was Fresnillo (LON:FRES), down 5.6% to 1690p. Next was Antofagasta (LON:ANTO) shares fell 5.5% to 511.5p, while Rio Tinto (LON:RIO) slid 4.7% to 2350.5p.
Primark owner Associated British Foods was the biggest riser on the index, gaining 3.4% to 3051p. The firm notched up gains after analysts at RBC increased its rating on the stock to "outperform" from "sector perform".
Shares in business supplies firm Bunzl (LON:BNZL) fell 0.5% to 2432.52p, despite a 6% rise in the company's half-year profits to £155.6m.
Bunzl said it was "difficult to give a firm view" on the impact of the Brexit vote to quit the European Union, but added it did not expect a significant impact on its business.
In economics news, UK inflation hit a two-year high while analysts at Bank of America Merrill Lynch had some cheerier news for investors: although the pound should keep sliding against the dollar in the aftermath of the June Brexit vote, it should hold firm against the single currency from here. Meaning, sterling will not hit parity against the beleaguered euro.
The midcap FTSE 250 index closed down 0.5% at 17,847 – still a good 500 points above where it closed on June 23, the eve of the Brexit result.
The FTSE AIM 100 Index ended flat at 3,760 – outperforming larger stock tickers – while the FTSE AIM All-Share Index rose 0.07% to 793.
Gainers and losers in London tied on Tuesday at 31% apiece, while 37% of stocks were unchanged.
London’s top gainer was Anglo African Agriculture PLC (LON:AAAP) up 44% to 0.75p.
Midsession
Top-flight stocks trod water on Tuesday amid mining pressure, but smaller natural resource stocks made progress.
The Footsie was 3.4 points ahead at 6841.46 as precious metals such as gold and silver lost their twinkle in the face of speculation about a US interest rate rise.
Chilean copper miner Antofagasta (LON:ANTO) was the sector’s biggest faller, dropping 4.9% to 515p, followed by Randgold Resources (LON:RRS) with a 4% loss to 7370p.
Meanwhile, the FTSE 250 Index, which contains many UK-focused firms dependent on imported supplies, fell more than 60 points to 17,870.4.
Small-cap indices were on the up, led higher by Kodal Minerals PLC (LON:KOD) with a 21% rise to 0.06p after it acquired a high-grade lithium project in Mali.
Galileo Resources PLC (LON:GLR) was the top gainer, up 12% at 1.15p after selling its Gabbs property in Nevada for £1.9mln in cash to help fund its copper exploration in South Africa.
Mosman Oil & Gas Limited (LON:MSMN) also increased 7.3% to 1.1p as the New Zealand and Australia-focused oil explorer and developer welcomed updates from companies in which it has stakes.
But shares in Botswana and southern Africa coal-bed methane group Tlou Energy Ltd (LON:TLOU) lost 18.2% to 6.75p on news of a proposed capital raising.
And Pressure Technologies Plc (LON:PRES) was under pressure by 11.1% to 140p as the specialist engineer forecast a significant hit to full-year results from contract delays.
Meanwhile, Patagonia Gold plc (LON:PGD) ticked up 10.8% to 1.8p after the miner with gold and silver projects in the southern Patagonia region of Argentina, Chile and Uruguay, updated the market on its open pit mine and heap leach processing site at Cap-Oeste and operations at the Lomada de Leiva mine.
Back in the top flight, budget airline easyJet PLC (LON:EZJ) was flying 13p higher at 1114p as traders cited reheated takeover rumours, although rival carriers were also up.
Luton-based easyJet has faced market talk about potential private equity interest, as well as speculation that founder Stelios Haji-Ioannou may team up with an aircraft lessor to take it private.
Support services group Bunzl PLC (LON:BNZL) posted strong first-half results, which benefited from the plunging pound.
Bunzl does more than 85% of its business outside the UK, meaning sterling's weakness after the EU referendum vote will lift its performance for the rest of the year if rates stay at current levels. Its shares rose 33p to 2453p.
The same was true of engineering group Dewhurst PLC (LON:DWHT), whose full-year results are now expected to be significantly higher than current forecasts due to the fall in the pound. The stock gained 82.5p to 710p.
Miner and commodity trader Glencore PLC (LON:GLEN) was down 3.2% at 179.1p. The group has suspended production at its Newlands coal mine in Australia after a contract worker died.
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Preview at 6.53am
As traders return after the long weekend, FTSE 100 is called to open higher as commodity prices make gains and after a higher close on Wall Street.
This week looks fairly quiet on the company front as summer draws to a close, but on the cards today is more on the ARM Holdings (LON:ARM) controversial £24bn takeover by Japan's SoftBank as shareholders of the UK's biggest high-tech firm get an AGM vote today.
Also on the agenda is a possible penalty from the European Commission levelled at US tech giant Apple (NASDAQ:AAPL) over its affairs with the Irish government, making it potentially liable to pay back taxes.
On Friday, the FTSE 100 Index closed 0.31% up, or around 21 points at 6,838, but today is expected to open around eight points higher.
In the US, the Dow Jones added 0.58% to 18,502, while the broader S&P500 index gained 0.52% at 2,180.
US crude oil is up 0.45% to US$47.19, having been lower earlier after jitters after US Federal Reserve governor Janet Yellen's comments on Friday at Jackson Hole, which hinted at a US rate rise next month.
Oil is priced in US dollars, and a rate rise could make it more expensive to foreign buyers.
Copper prices are also up - 0.6% to $4,642 a metric ton, which has sent commodities-related company shares prices up.
In Asia, the Shanghai Composite Index is up 0.39% to 3,082 with around an hour of trading left, while Japan's Nikkei 225 index is down a tad - 0.07% to 16,726.
City headlines
Mondelez abandons Hershey takeover bid - The Financial Times
Apple to be hit with multi-million euro tax demand- The Telegraph
Foreign investment boom boosts UK growth hopes - The Telegraph
The last gasp bid to keep ARM Holdings PLC (LON:ARM) British: Shareholders to vote on £24bn Japanese takeover- ThisisMoney