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FTSE falls on weak mining and utility stocks

12 June 2017 16:40

The blue-chip index remained weak as miners and utility stocks underperformed.

Fresnillo (FRES) topped the fallers on the FTSE with a 4.7% drop to £16.44 as silver prices fell 1% to $17 per ounce and gold prices declined by 0.3% to 1,264 per ounce.

Randgold Resources (RRS) and Antofagasta (ANTO) were also down 1.8% and 1.7% respectively.

In the utility space, Severn Trent (SVT) slid 1.5% lower to £24.65 and United Utilities (UU.) slipped 1% to 983.4p. National Grid (NG.) was also 0.9% down.

The FTSE closed 0.2% lower at 7,510.

Brent crude oil rallied 1.4% to 48.83 per barrel and copper cheapened 0.8% to $5,798 per tonne.

In the UK, the Institute of Directors revealed a sharp drop in business confidence and concern over political uncertainty, which added pressure on Prime Minister Theresa May who failed to gain a majority on Friday.

This resulted in a hung government and calls for May to resign after she lost seats in last week's election.

OVERSEAS MARKETS

Following the worst one-day share price performance for Apple in over a year on Friday, the tech sell-off continued in the US, triggering a 0.8% decline in the tech-focused Nasdaq index.

The slump in the sector also weighed on Asian equities on Monday, with Hong Kong's Hang Seng suffering the biggest decline of 1.2% to 25,708.

FTSE 100 RISERS AND FALLERS

In corporate news, Glencore (GLEN) proposed the acquisition its rival Rio Tinto's (RIO) 100% interest in Coal & Allied Industries for $2.5bn in cash, with a royalty linked to coal prices. The news failed to impress investors marked both stocks up to 0.6% lower.

FTSE 250 RISERS AND FALLERS

Online food delivery service Just Eat (JE.) slumped 3.7% to 657.5p on news that chairman Dr John Hughes passed away following a short period of medical treatment. Hughes used to hold senior positions at Thales Group, Lucent Technologies and Hewlett Packard.

Acacia Mining (ACA) continued to struggle ahead of the Presidential Committee's findings in Tanzania. The government accused Acacia of operating illegally in the country by under-reporting the amount of gold it was exporting. It became the biggest mid-cap faller as the stock plummeted 13% to 261.2p.

Management services company Mitie (MTO) continued to bounce back from recent share price weakness. Despite ditching the dividend and stacking up an operating loss of £42.9m, the stock gained 13.4% to 280p as it signalled a return to 'modest growth' in the current financial year under new management.

Engineer Weir's (WEIR) acquisition of Singapore firm KOP and expansion into Asia failed to impress investors as the stock retreated 1.9% to £18.64.

SMALL CAP RISERS AND FALLERS

The biggest winner among the small caps was Great Western Mining (GWMO) as the stock rocketed by 107% to 0.8p. The exploration company reported its latest increase in mineral resources at the M2 copper-gold prospect in Nevada after a comprehensive review.

Shares in Stanley Gibbons (SGI) went 13.9% in the other direction to 10.9p after the company put itself up for sale following extensive restructuring.

Elsewhere in the mining sector, Greatland Gold (GGP) applied for licences covering a large cobalt exploration property in the Pilbara region of northern Western Australia. The stock rose 16% to 0.7p.

Used cars were becoming more popular with drivers - a trend that Motorpoint (MOTR) took advantage of. Overall sales were up 12.7% to £822m in the year to the end of March 2017 thanks to year-on-year volume growth of over 7% in the used car market.

Sound Energy (SOU) nudged 4.5% lower to 64p on an update concerning drilling operations in Morocco and Italy, including re-entry into the Moroccan Koba-1 well. The chief executive, James Parsons, is also working on reviving Echo Energy (ECHO) where he is chairman. Echo appointed Rockhopper (RKH) chief operating officer Fiona MacAuley as its new CEO.

Story provided by StockMarketWire.com

Related Company: GLEN

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