FTSE 100 watch: Miners prove a drag on blue-chip index

Mondi share price tumbles as group updates on trading

FTSE 100 watch: Miners prove a drag on blue-chip index

The UK benchmark index has been subdued in today’s session, pressured by a drop in resource stocks. A hefty fall in Mondi (LON:MNDI) is also weighing on the FTSE 100 after the packaging company posted a trading update.  

Miner-heavy index loses ground

As of 12:14 BST, the FTSE 100 had given up 5.57 points to stand 0.07 percent lower at 7,532.70. Miners are leading the blue-chip index lower, amid political worries over the ongoing Brexit negotiations and the situation in Catalonia. BHP Billiton (LON:BLT) has been the sector’s biggest faller in percentage terms, having lost 1.54 percent to 1,375.00p so far in today’s session.

“I would sit on the fence with it. The FTSE has moved a long way already and it looks quite toppy,” Rory McPherson, head of investment strategy at Psigma Investment Management, told Reuters. “The economic data has been almost universally poor. It’s not a brilliant picture which you would associate with the FTSE doing well.”

Investors are also staying on the sidelines ahead of the release of the minutes from the Federal Reserve’s latest policy meeting, which will be eyed for clues for a potential rate hike in December.

Winners & Losers

Mondi has been today’s most notable FTSE 100 faller after warning that continuing cost pressures and negative currency impacts are likely to result in an underlying performance for the year modestly below market expectations.

“We would expect the share to be slightly weaker on this announcement given a generally favourable backdrop on the pricing side being offset by the cost increases,” analysts at UBS commented, as quoted by The Telegraph. Mondi share price is 8.01 percent down at 1,921.67p.

At the other end of the spectrum has been Smith & Nephew (LON:SN), whose shares have jumped 3.16 percent to 1,402.00p after news emerged that activist investor Elliott had built a stake in the company.

The FTSE 100 was 0.20 percent up at 7,523.51 points as of 12:39 BST on Wednesday, 11 October 2017.

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