LONDON MARKETS: FTSE 100 Slammed As Commodity Shares Tumble

By Carla Mozee and Sara Sjolin, MarketWatch

London index on track for monthly gain

U.K. stocks ended lower on Wednesday after a wobbly start to the day, with commodity shares leading the decline as oil futures slumped.

The FTSE 100 lost 0.6% to close at 6,781.51, trimming its monthly gain to 0.9%.

"Tumbling commodity prices have once more proven the undoing of the FTSE, with a late slide in crude prices adding to the woes of an index heavily weighted towards commodity companies, " said Josh Mahony, market analyst at IG in a note.

Crude oil slid to its lowest level since mid-August, down more than 3%, after the U.S. Energy Information Administration reported a bigger-than-expected jump in weekly inventories (http://www.marketwatch.com/story/oil-extends-losses-after-eia-data-show-us-crude-supplies-up-23-mln-barrels-2016-08-31).

Oil companies tracked the futures lower, with BP PLC (BP.LN) (BP.LN) down 1.3% and Royal Dutch Shell (RDSB.LN) (RDSB.LN) 1.8% lower.

The weakness in oil also sent London's miners lower. Precious metal producer Fresnillo PLC (FRES.LN) fell 5%, Randgold Resources PLC (RRS.LN) gave up 2.9%, and iron ore miner BHP Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) lost 4.9%.

But housing shares were mostly higher after the Nationwide Building Society said U.K. house-price growth picked up slightly in August (http://www.marketwatch.com/story/uk-home-prices-pick-up-despite-brexit-2016-08-31), in contrast with earlier signs that the housing market may be cooling after the country's Brexit vote in June.

Berkeley Group Holdings PLC (BKG.LN) gained 3%, Barratt Developments PLC (BDEV.LN) tacked on 0.4%, and Taylor Wimpey PLC's stock (TW.LN) rose 0.4%.

The pound pushed higher following the house-price data, trading at $1.3129, compared with $1.3081 late Tuesday.

(END) Dow Jones Newswires

August 31, 2016 12:21 ET (16:21 GMT)

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