FTSE 100 watch: Footsie subdued as fall in oil weighs on resource stocks

on Mar 21, 2016

The UK benchmark index has been little changed in early afternoon trade, giving up its morning gains, with a pullback in the oil price weighing on sentiment. Shire (LON:SHP) meanwhile has climbed to the top of the FTSE 100 leaderboard amid positive analyst comments.

As of 12:18 GMT, the Footsie had lost 6.68 points to stand 0.11 percent lower at 6,182.96, having traded about 0.1 percent higher earlier in the session.
Resource stocks are dragging the index lower, with a higher rig count in the US weighing on oil prices. Antofagasta (LON:ANTO) is currently the biggest blue-chip faller in percentage terms, having lost 3.63 percent to 495.80p so far today. CNBC meanwhile quoted analysts as commenting that while there has been a recent bounce in stocks, the market fundamentals remain weak.

“The dynamics that have prevailed, that have brought about their weakness still persist,” Benjamin Gutteridge, head of fund research at Brewin Dolphin, told the newswire in a TV interview today. “I guess central banks activities [are] catching a bit of a bid, but really when it comes down to fundamentals and earnings quality, we just don’t see it.”
At the other end of the spectrum has been Shire, whose shares have spiked 3.31 percent to 3,813.00p. The Guardian quoted analysts at Exane BNP Paribas as saying that the stock looked too cheap after falling since the pharmco unveiled plans to take over US business Baxalta.
“We’ve seen a plethora of different broker upgrades on (Shire) over the last number of weeks,” Brenda Kelly, head analyst at London Capital Group, told Reuters. “I think it’s the fact that it has had a very decent Q4.”
**The FTSE 100 was 0.29 percent down at 6,171.57 points as of 12:28 GMT on March 21, 2016.**

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