LONDON MARKETS: FTSE 100 Heads Toward First Fall In 3 Sessions As Miners, Oil Stocks Decline

By Carla Mozee, MarketWatch

Brexit bill heads back to parliament

U.K. stocks dropped Monday, as oil shares were knocked down and as mining shares struggled after data showed modestly slowing economic growth in China, putting the London benchmark at risk for its first loss in three sessions.

How markets are moving

The FTSE 100 index stumbled 0.9% to 7,592.70, led by the oil and gas and basic materials sectors. On Friday, the benchmark rose 0.1% (http://www.marketwatch.com/story/ftse-100-steps-higher-pound-falls-as-trump-criticizes-soft-brexit-plan-2018-07-13) and finished last week with a 0.6% rise, the first gain in three weeks.

The pound traded at $1.3243, up from $1.3234 late Friday in New York.

What's driving the market

Falls in commodity stocks hurt the FTSE 100, as they are heavily weighted on the benchmark. Shares of oil producers dropped to intraday lows Monday following reports that U.S. Treasury Secretary Steve Mnuchin said the U.S. may consider granting waivers to certain importers who buy supply from Iran, which is under U.S. sanctions. Some importers may want to wind down purchases but may be unable to do so in a timely manner, he said.

Mining stocks, which are heavily weighted on the FTSE 100, struggled Monday in the wake of Chinese figures on gross domestic product in the second quarter. Quarterly growth in China -- the largest consumer of industrial metal copper -- came in at 6.7%, (http://www.marketwatch.com/story/china-growth-slows-slightly-in-second-quarter-2018-07-16) the slowest rate since the third quarter of 2016, as Beijing continued efforts to rein in debt at financial institutions.

"The growth data may have been in line with economist expectations, and above Beijing's own 6.5% target, but the risk is that Asia's powerhouse slows even further should a U.S.-instigated trade war gather momentum," said Accendo Markets analysts Mike van Dulken and Artjom Hatsaturjants in a note.

Europe, China and the U.S. have a duty "not to start trade wars," said European Council President Donald Tusk, who spoke on Monday at a summit between European Union and Chinese officials in Beijing. The U.S. government last week said it plans to expand its tariffs against Chinese goods imported into the U.S. to $200 billion in products. President Donald Trump called the EU "a foe" (http://www.marketwatch.com/story/trump-the-european-union-is-our-foe-2018-07-15) of the U.S. in an interview with CBS Evening News that aired Sunday.

Read: These are the retail brands that will be hurt most by Chinese tariffs (http://www.marketwatch.com/story/these-are-the-retail-brands-that-will-be-hurt-most-by-chinese-tariffs-2018-07-12)

Also:Here's when Americans will start feeling the pain from escalating Trump-imposed tariffs (http://www.marketwatch.com/story/heres-when-americans-will-start-feeling-the-pain-from-escalating-trump-imposed-tariffs-2018-07-11)

Also in focus on Monday will be fresh votes in the U.K. House of Commons on amendments to the bill that will take the U.K. out of the European Union. They will be the first votes on amendments related to trade after U.K. Prime Minister Theresa May won support for a soft-Brexit strategy from her cabinet when they met at Chequers earlier this month. That strategy includes negotiating for frictionless trade in goods between the U.K. and the EU.

But May's vision moving forward prompted resignations by cabinet members David Davis and Boris Johnson, among others, and Monday's votes face the prospect of rebellion by members of May's Conservative Party. In an article published Monday in the Telegraph newspaper (https://www.telegraph.co.uk/politics/2018/07/15/rest-world-believes-britain-time-did/), Johnson, who had served as Foreign Secretary, wrote that Britain should "militate ceaselessly for free trade deals" and said Britain needs to believe it can stand strong in a post-Brexit environment.

Stock movers

Among miners, Glencore PLC (GLEN.LN) dropped 0.9%, BHP Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) fell 0.5% and Antofagasta PLC (ANTO.LN) gave up 0.3%.

In the oil sector, shares of Royal Dutch Shell PLC (RDSA.LN) (RDSA.LN) fell 2.3% and BP PLC (BP.LN) (BP.LN) lost 2.4%.

Hargreaves Lansdown (HL.LN) fell 4% after the U.K. Financial Conduct Authority (https://www.fca.org.uk/publications/market-studies/ms17-1-investment-platforms-market-study)said it's considering banning exit fees from online investment platforms.

Micro Focus International PLC (MCRO.LN) lost 4.5% after Credit Suisse reportedly cut its rating on the software maker.

Indivior PLC (INDV.LN) soared 33% on the mid-cap FTSE 250 index after the drug maker late Friday said it won a preliminary injunction against Dr. Reddy's Laboratories Ltd (http://www.marketwatch.com/story/indivior-wins-prelim-injunction-vs-dr-reddys-2018-07-16). (500124.BY) (500124.BY) over a product that treats opioid dependence.

(END) Dow Jones Newswires

July 16, 2018 11:14 ET (15:14 GMT)

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