FTSE ends poor quarter with another drop

People walk through the lobby of the London Stock Exchange in London, Britain August 25, 2015. Reuters/Suzanne Plunkett

LONDON UK shares retreated on Thursday, ending a weak first quarter of 2016 on a downbeat note, although a recovery in mining shares helped it outperform euro zone indexes.

Britain’s FTSE 100 .FTSE1 was down 28.27 points, or 0.5 percent, at 6,174.90 by the close. That left the index down 1.1 percent in 2016 as the first quarter drew to a close.

The index began the year with steep falls, down over 10 percent by mid-February, as concerns over a weak oil price and fragile growth in China gripped markets.

However, an impressive rebound in commodities since then has helped to buoy the FTSE 100, which has managed a gain of 1.3 percent in March.

Miners managed to extend their strong run after a weak start, with copper steadying after touching a four-week low, buoyed by strong manufacturing data and a weaker dollar.

That helped the FTSE 100 outperform a 1.2 percent fall for euro zone blue chips .STOXX50E2, with the euro’s strength against sterling also providing a relative benefit for internationally exposed UK-listed stocks.

“The weaker US dollar has served up a degree of support for the heavyweight commodity stocks with some … managing to reverse earlier losses as we head into the close, but it s still a minority of stocks printing positive figures on the day,” said Tony Cross, market analyst at Trustnet Direct.

However energy stocks trimmed 9 points off the index even after oil prices recovered following a weak start.

Life insurance company Old Mutual (OML.L) and Wolseley (WOS.L) fell 1.8 and 1.4 percent after going ex-dividend. In all, ex-divs took around 2.2 points off the FTSE 100 index.

However, a rise in summer bookings for tour operator TUI Group sent its shares up 5 percent after the company said it was on track to meet its annual target.

“Tour operator TUI has however been something of a stand-out with the market cheering the fact that sales are holding up for the summer despite the deteriorating security situation in many Discount Holidays © holiday hotspots,” Trustnet Direct’s Cross said.

Shares in cruise company Carnival (CCL.L) also gained 1.6 percent after upgrades following its own well-received results in the previous session.

The UK travel and leisure sector .FTNMX5750 advanced 0.5 percent, touching a two-and-a-half week high earlier in the session.

Among mid-caps, online retailer AO World (AO.L) jumped 3.6 percent after it said that gaining market share helped to boost UK revenue and EBITDA ahead of its target.

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(Editing by Tom Heneghan)

References

  1. ^ .FTSE (uk.reuters.com)
  2. ^ .STOXX50E (uk.reuters.com)

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