FTSE falls as mining shares drop
UK shares retreated on Thursday as mining stocks were hit by a drop in metals prices.
|||London - UK shares retreated on Thursday as mining stocks were hit by a drop in metals prices, although investors cheered a rise in summer bookings for tour operator TUI Group.
A fall in copper prices to a four-week low weighed on mining companies. Concern over slowing demand in China, the world's top consumer of metals, came into focus before the release of a manufacturing Purchasing Managers' Index on Friday.
BHP Billiton, Glencore, Rio Tinto, Anglo American, and Antofagasta fell 1.2 to 3.3 percent.
“The recent rebound in metal and oil looks to be running out of steam with the recent rally looking more like a dead cat bounce,” said Manoj Ladwa, head of trading at TJM Partners.
The FTSE 100 index was down 0.7 percent at 6,158.40 points by 08h12 GMT, slightly outperforming the broader European market.
Life insurance company Old Mutual, InterContinental Hotels Group and Wolseley fell 1.2 to 3.4 percent after going ex-dividend, taking around 2.3 points off the FTSE 100 index.
However, a rise in summer bookings for tour operator TUI Group sent its shares up over 6 percent, after the company said it was on track to meet its annual target.
Shares in cruise company Carnival also gained 1.4 percent, and the UK travel and leisure sector advanced 0.4 percent to a two-and-a-half week high earlier in the session.
“(TUI Group) has been hit hard by the deteriorating situation in many key destinations like Turkey, Egypt and North Africa, but a bullish trading outlook this morning - and arguably the fact that the shares had been sold down a little too aggressively - has served to leave the stock trading... higher,” Tony Cross, market analyst at Trustnet Direct, said in a note.
Among mid-caps, online retailer AO World jumped 7.4 percent after it said that gaining market share helped boost UK revenue and EBITDA ahead of its target.
REUTERS