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Commodity stocks weigh on FTSE 100 ahead of UK spending plan

Stock Markets21 minutes ago (Oct 27, 2021 10:15)

© Reuters. FILE PHOTO: Signage is seen outside the entrance of the London Stock Exchange in London, Britain. Aug 23, 2018. REUTERS/Peter Nicholls

By Bansari Mayur Kamdar

(Reuters) -UK’s blue-chip index slipped on Wednesday as miners were hit by sliding metal prices, although some positive earnings reports helped limit losses ahead of the government’s spending plan.

The commodity-heavy FTSE 100 index slipped 0.2%, with miners declining 1.7% over China’s latest moves to cool soaring commodity prices. [MET/L]

Miners Glencore (LON:GLEN), Rio Tinto (LON:RIO) and Anglo American (LON:AAL) fell between 1.4% and 3% in morning trade, while weaker crude prices hit oil majors BP (LON:BP) and Royal Dutch Shell (LON:RDSa). [O/R]

Traders are awaiting UK finance minister Rishi Sunak’s budget statement later in the day, though plans for a higher corporate tax and national insurance contributions alongside more government spending are already known.

“Retailers will feel the pinch as the push to increase rates grows, alongside the extra pressure of the rise in minimum wage expected in today’s budget,” said Emma Wall, head of investment analysis at Hargreaves Lansdown (LON:HRGV). “And there is the rising corporation tax affecting all the stocks of the FTSE 100.”

Retailers warned on Wednesday of pre-Christmas price rises with the chief executive of the British Retail Consortium trade body saying that increased costs from labour shortages, supply chain disruptions and rising commodity prices are trickling down to the consumer.

The domestically focussed mid-cap index was nearly flat after recovering about 13.2% this year, and slightly outpacing a 12.5% rise in the FTSE 100 index.

In earnings-driven moves, Harry Potter publisher Bloomsbury Publishing announced an increase in dividend after reporting a strong rise in half-year revenue and profit, pushing its stock up 5.1%.

Precious metals miner Fresnillo Plc (LON:FRES) slipped 0.5% after reporting a fall in gold and silver production for the quarter and issues with labour shortage due to new labour reforms in Mexico.

Commodity stocks weigh on FTSE 100 ahead of UK spending plan

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