Oil stocks weigh on the FTSE 100; Darktrace collapses at 2 month low

Pedestrians exit and enter the London Stock Exchange in London, Great Britain, August 15, 2017. REUTERS / Neil Hall

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  • Miners recover as copper prices rise
  • Darktrace slips as investor sells stake
  • FTSE 100 down 0.4%, FTSE 250 down 0.2%

Nov 3 (Reuters) – London’s FTSE 100 slipped on Wednesday as losses in heavy oil stocks and the stronger pound weighed on, as traders held back on uncertainty surrounding a possible UK rate hike.

The commodity-rich FTSE 100 (.FTSE) ended down 0.4%, posting its worst session in nearly two weeks, dragged down by weakness from oil majors Royal Dutch Shell (RDSa.L) and BP (BP.L).

The UK’s energy sub-index (.FTNMX601010) fell 2.2%, following crude prices after industry data showed a sharp increase in crude oil and distillate inventories in the USA.

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“Any near-term weakness in oil prices and oil producers is a potential buying opportunity,” said Joshua Mahoney, market analyst at IG Group.

The index’s dollar gains, including Diageo (DGE.L), Unilever (ULVR.L) and British American Tobacco (BATS.L), were hit by strong gains in the pound sterling.

Driven by soaring fuel prices, UK energy stocks have significantly outperformed other sectors and the FTSE 100 index this year. However, their performance this quarter has been subdued so far, down 0.8%, compared to a 2.5% increase for the benchmark.

Recent signs of slowing economic growth have raised doubts among investors about possible interest rate hikes ahead of the Bank of England meeting on Thursday. Read more

“The challenge central bankers face is that if they move too early on rates they risk stifling the recovery too late and the obvious inflationary pressures could get out of hand,” said Russ Mold, chief investment officer at AJ Bell.

Base metal miners (.FTNMX551020) rebounded 0.6%, on high copper prices.

Clothing retailer Next Plc (NXT.L) was among the worst performers on the blue chip index, down 3.3% after warning of slowing sales growth. Read more

Cyber ​​security firm Darktrace Plc (DARK.L) fell 5.1% to a more than two-month low after UK private equity firm Vitruvian Partners said it sold around 11 million common shares of the company.

The domestically focused midcap index (.FTMC) erased initial gains to end down 0.2%, Trainline (TRNT.L) slipping 7% after reporting lack of clarity on the plan British company Williams Shapps, and its potential implications create uncertainty for the railway operator.

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Dark days for Darktrace, stock down 36.2% in two weeks so far

Reporting by Bansari Mayur Kamdar and Amal S in Bangalore; Editing by Shounak Dasgupta, William Maclean

Our Standards: Thomson Reuters Trust Principles.

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Felix J. Dixon