LONDON MARKETS: FTSE 100 Ends Lower, Weighed Down By Housing Stocks, Royal Mail

By Carla Mozee and Victor Reklaitis, MarketWatch

Miners fall as dollar strength pressures metals prices

Stocks in the U.K. closed lower Thursday as home-builder shares fell after a lackluster update on house prices, while Royal Mail PLC shares struggled following a trading update.

The FTSE 100 lost 0.5% to end at 7,208.44, after rising 0.4% on Wednesday (http://www.marketwatch.com/story/ftse-100-in-recovery-mode-after-worst-selloff-in-six-months-2017-01-18).

British blue-chips remained in the red while the broader European equity market briefly turned positive after European Central Bank President Mario Draghi said the bank continues to stand ready to extend stimulus measures for the eurozone economy, if needed.

Read Live Blog recap of Draghi's press conference (http://blogs.marketwatch.com/thetell/2017/01/19/ecb-live-blog-mario-draghi-expected-to-maintain-dovish-course/)

In London, a 6% drop dragged Royal Mail (RMG.LN) shares to the bottom of the FTSE 100. The delivery company said U.K. sales declined 2% in the nine months to Dec. 25 (http://www.marketwatch.com/story/royal-mail-uk-sales-fall-2-holds-to-outlook-2017-01-19). But trading was in line with expectations, it said, as strong performance over Christmas helped counter those poor figures.

Meanwhile, home-builder stocks lost ground after a Royal Institution of Chartered Surveyors survey found U.K. house-price growth slowed in December, for the first time since July.

Shares of Barratt Developments PLC (BDEV.LN) and Taylor Wimpey (TW.LN) fell 2.1% and 1.3%, respectively, and Persimmon PLC (PSN.LN) gave up 1%.

Miners on the move: Mining shares were moving lower as most metals prices fell, with gold down about 1% and silver losing 2%. The moves for metals came as the dollar rose, following Federal Reserve Chairwoman Janet Yellen's comment (http://www.marketwatch.com/story/feds-yellen-says-she-expects-rates-to-rise-a-few-times-a-year-until-end-of-2019-2017-01-18) that the central bank expects a few interest rate hikes a year through the end of 2019. A strong buck can make dollar-denominated metals more expensive for holders of other currencies.

Copper miner Fresnillo PLC (FRES.LN) fell 3.4%, Randgold Resources PLC (RRS.LN) (RRS.LN) lost 1%, and Anglo American PLC (AAL.LN) shed 3.1%. But Antofagasta PLC (ANTO.LN) was up 0.7%.

Shares of BHP Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) gave up 0.6%. The mining heavyweight and its Samarco Mineracao SA joint venture partner Vale SA (VALE5.BR) agreed a settlement plan with federal prosecutors in Brazil (http://www.marketwatch.com/story/bhp-billiton-vale-jv-agree-dam-settlement-plan-2017-01-19). The plan covers negotiations over a $47.5 billion civil claim linked to a deadly dam failure.

In other moves, Hammerson PLC (HMSO.LN) fell 2.9% following a downgrade to underperform from hold at Jefferies, according to Dow Jones Newswires.

Sterling was buying $1.2316, up from $1.2268 late Wednesday.

U.K.'s May and ECB's Draghi: The European Central Bank left its key interest rates steady, as expected. Draghi at his press conference in Frankfurt said there's still no sign of a "convincing" upward trend in underlying inflation, although headline inflation will probably continue to rise because of higher energy prices.

The euro fell below $.1.06 on Draghi's dovish stance on future QE, then was recently trading at $1.0629.

There will need to be "a significant increase in core inflation and wages before the ECB would consider a further, faster or earlier reduction of QE," said Carsten Brzeski, chief economist, at ING in a note. "In our view, even a hint at 2018 tapering will not come before the summer, after the Dutch and French elections and the first possible impact of new U.S. economic policies."

Earlier Thursday, British Prime Minister Theresa May told the World Economic Forum in Davos, Switzerland, that Britain is open for business to the world after last year's Brexit vote. She said the result of the referendum wasn't aimed at undermining the European Union, but voters wanted the country to have greater freedom to make sovereign decisions.

Read:May urges businesses to 'play by the same rules' that ordinary workers follow (http://www.marketwatch.com/story/may-urges-businesses-to-play-by-the-same-rules-that-ordinary-workers-follow-2017-01-19)

(END) Dow Jones Newswires

January 19, 2017 11:52 ET (16:52 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.