UK’s FTSE 100 Holds Firm as Mining and Oil Gains Balance Market Weakness
FTSE 100 Market Performance and Sector Highlights
Aug 20 (Reuters) - The UK's FTSE 100 closed flat on Thursday, as gains in commodity-related stocks were offset by weakness elsewhere, led by a plunge in JD Sports shares after the company issued a downbeat forecast.
The blue-chip FTSE 100 index held steady at 10,748.16 points, while the midcap FTSE 250 fell 0.55% to 24,508.66 points.
Major Decliners and Corporate Updates
JD Sports Faces Sharp Decline
• Britain's JD Sports shed 14.32%, becoming the biggest decliner in the FTSE 100, after the sportswear and fashion retailer cut its profit outlook following a slump in second-quarter sales in its North American market.
Analyst Commentary on JD Sports
• "Several profit warnings in the previous year put a lid on any share price appreciation, and this latest downgrade will do little to cheer investor spirits," said Richard Hunter, head of markets at interactive investor.
Other Notable Decliners
• Shares of insurer Legal & General and wealth manager Investec fell 3.9% and 4.6%, respectively, as they traded ex-dividend.
• Rail ticketing company Trainline fell 9%, extending its losses on Wednesday when news broke the competition regulator was at an early stage of investigating its ticket-pricing practices.
Commodity and Defensive Sector Gains
Bond Yields and Oil Prices
• The yield on British 30-year government bonds edged up 2.6 basis points to 5.81% after having fallen to as low as 5.757% on Wednesday following a surprise U.S. Treasury buyback announcement.
• Oil prices climbed to three-week highs, driven by concerns that the impasse in the Iran war will mean continued supply disruption from the Middle Eastern producing region, advancing oil majors BP and Shell 2.4% and 0.6% respectively. [O/R]
Mining Sector Performance
• Gold miners also rose. Fresnillo added 2.7%, Endeavour Mining rose 2.07% and Pan African Resources gained 8.87%.
• Industrial metal miners climbed 0.6%.
Consumer Staples Support
• Consumer staples stocks British American Tobacco, Diageo and Unilever were also higher, offering support to the main index.
(Reporting by Anand Gopal and Sruthi Shankar in Bengaluru; Editing by Harikrishnan Nair, Vijay Kishore and Barbara Lewis)
