Britain's FTSE Extends Losses After Bank Of England Comments

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Britain's top share index extended losses on Wednesday after the Bank of England (BoE) pledged to keep interest rates low for a longer period, but expressed caution about the fragile economic recovery.

FTSE

* FTSE 100 index falls 1 percent

* Market reacts negatively to BoE comments

* Miners top fallers on metals demand concerns

Britain's top share index extended losses on Wednesday after the Bank of England (BoE) pledged to keep interest rates low for a longer period, but expressed caution about the fragile economic recovery.

The bank planned to keep rates at a record low until unemployment fell to 7 percent from 7.8 percent, but its Governor Mark Carney also said the UK economy was not "at escape velocity right now" and the legacy of the financial crisis meant that the recovery remained weak by historical standards.

The bank also said Britain's housing market was recovering but key measures of activity were well below previous peaks.

"The (BoE's) forward guidance is not great," said Logic Investments director Khilan Shah. "As soon as the FTSE went down past 6,600, we had 'short' orders ready and waiting."

By 1016 GMT, London's blue chip index was down 1 percent at 6,540.69 points, a decline for a fourth day in a row.

Miners led the market down, with the UK mining index falling 1.8 percent to top the decliners list also on the back of poor earnings and concerns about global demand for industrial metals like copper.

Randgold Resources fell 5.3 percent after the Africa-focused miner posted a 62 percent drop in quarterly profit, while Fresnillo, which reported falling profits on Tuesday, shed 1.3 percent as brokers began cutting targets following the results.

Glencore Xstrata slid 1.8 percent after the miner and JPMorgan Chase & Co were hit with a U.S. lawsuit, along with the London Metal Exchange, alleging they artificially inflated aluminium prices.

Charts painted a bearish outlook in the near term, with Bill McNamara, technical analyst at Charles Stanley, saying that the loss of upside momentum was becoming a cause for concern.

"That's an issue that could acquire greater significance in the near term if the U.S. markets start to pull back from their recent highs, although the FTSE would have to break below 6,535 to slip through the low end of its trading range.

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