The FTSE 100 was lower heading into the weekend as mining stocks and companies that rely on the UK for revenue weighed on the index.
London’s leading index was down 0.4% at the time of writing and was on the verge of erasing all of this week’s gains.
Mining companies had rallied earlier in the week on hopes of Chinese economic stimulus, but these hopes were dashed overnight by the decision by the Chinese central bank on hold interest rates.
Antofagasta, Rio Tinto and Glencore were among the top fallers, declining between 3.7% and 1.8%, as investors reduced positions in disappointment.
“The FTSE 100 fell after more selling on Wall Street overnight and weakness in Asia as the Bank of China kept rates unchanged. This put pressure on the mining space given heavy Chinese consumption of commodities,” said AJ Bell investment director Russ Mould.
JD Sports was the top faller after Nike released another set of poor results that raised fears that JD Sports would feel the pinch given that a large proportion of the goods they sell are Nike.
“Among the fallers was JD Sports Fashion as the retailer reacted to weak results from Nike overnight,” Mould explains.
“The US sportswear giant warned the current quarter could see the company absorb a lot of pain as it looks to turn around its fortunes under new CEO Elliott Hill amid signs of slowing demand among American consumers. This overshadowed a better-than-feared showing in the three months to the end of February.”
UK-centric sectors, including banks and housebuilders, also dragged on the index following the Bank of England’s most recent assessment of the economy and news of a deterioration in the UK’s public finances.
“UK Chancellor, Rachel Reeves, was already in a super-tight spot in terms of the public finances and she’s now facing a further squeeze,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
“UK government borrowing jumped above expectations in February, with spending on benefits and investment rising more sharply than forecast. ONS figures show public sector net borrowing came in at £10.7 billion in February, which is £4.2 billion higher than had been forecast by the Office for Budget Responsibility (OBR).
“It cements expectations that Rachel Reeves will go further in tightening the public purse by cutting expenditure in the years to come.’
Barclays slipped 3%, and NatWest gave up 0.7%. Lloyds shares fell 1.7%.
Housebuilders Persimmon, Barratt Redrow, and Taylor Wimpey were lower after the Bank of England showed little signs of cutting interest rates.