LONDON MARKETS: FTSE 100 Weighed Down By Housing Shares, Royal Mail

By Carla Mozee, MarketWatch

Miners fall as dollar strength pressures metals prices

Stocks in the U.K. traded 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 7,210.411, with only the consumer goods sector showing a modest gain. On Wednesday, the benchmark rose 0.4% (http://www.marketwatch.com/story/ftse-100-in-recovery-mode-after-worst-selloff-in-six-months-2017-01-18).

A 5.4% drop dragged Royal Mail (RMG.LN) shares to the bottom of the London benchmark. The delivery company reported 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 the Christmas period 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) each fell 1.5%, and Persimmon PLC (PSN.LN) gave up 1.1%.

Miners on the move: Mining shares were moving lower as most metals prices fell, with gold down nearly 1% and silver losing nearly 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 2.3%, Randgold Resources PLC (RRS.LN) fell 1.2%, and Anglo American PLC (AAL.LN) shed 2.2%. But Antofagasta PLC (ANTO.LN) was up 1.2%.

Shares of BHP Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) turned lower, losing 0.5%. 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.

Equities overall also felt the weight of a rebound in the pound, with sterling was buying $1.2331, up from $1.2268 late Wednesday.

U.K.'s May and ECB's Draghi: The European Central Bank on Thursday met widely held expectations by leaving its key interest rates steady, including its overnight deposit facility at minus 0.4%. ECB President Mario Draghi is expected to hold a conference call at 1:30 p.m. London time. Last month, the ECB decided to extend its bond-buying program through the end of 2017, but reduce the pace of monthly purchases to EUR60 billion from EUR80 billion, starting in April.

Read:'The more boring, the better'--what to watch from the ECB today (http://www.marketwatch.com/story/the-more-boring-the-better-why-analysts-are-hoping-for-an-ecb-snoozer-2017-01-18)

British Prime Minister Theresa May told attendees at 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 foll (http://www.marketwatch.com/story/may-urges-businesses-to-play-by-the-same-rules-that-ordinary-workers-follow-2017-01-19)ow

(END) Dow Jones Newswires

January 19, 2017 08:11 ET (13:11 GMT)

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