UK’s FTSE 100 dragged down by miners, financial stocks

By Siddarth S and Shreyashi Sanyal

(Reuters) -Britain’s FTSE 100 closed lower on Tuesday, weighed down by declines in the mining sector after Glencore’s earnings plunged and China reported bleak trade data, while financials were also a big drag on the index.

The blue-chip index ended 0.4% lower, with Glencore down 2.6% after the Swiss miner said its earnings halved in the first half of the year.

Data showing a faster-than-expected decline in top metals consumer China’s imports and exports in July heightened concern over demand, weighing on prices of base metals.

The industrial metals and mining sector declined 1.9%, hitting its lowest level in nearly a month.

“Miners are particularly affected by some short term volatility in the Chinese economy. It’s clearly a concern (for) commodity stocks in the short term,” said Russ Mould, Investment director at AJ Bell.

Asset manager abrdn slumped 11.7% to the bottom of the FTSE 100 after it reported a drop in its assets under management.

The banking index shed 1.5% as global sentiment soured after Moody’s cut credit ratings of several small-to-mid-sized U.S. lenders on Monday.

“The downgrades of these handful of banks has been enough to stoke fears again that the U.S. banking crisis has not, in fact, gone away,” said Stuart Cole, chief macro economist at Equiti Capital.

Italy’s approval of a 40% windfall tax on domestic lenders also hurt sentiment for Europe’s financial sector on Tuesday.

Britain’s more domestically-focussed FTSE 250 midcap index ended 0.1% lower, with losses contained by a 15.4% surge in shares of TI Fluid Systems following a buyback plan.

Among other stocks, InterContinental Hotels Group, hit a record high, rising 2.3% as the Holiday Inn owner said it expects room revenue growth to remain positive across its regions in the second half of 2023 “irrespective of any” macroeconomic pressures.

(Additional reporting by Rupali Chaudhary and Khushi Singh in Bengaluru; Editing by Sonia Cheema and Mark Potter)