LONDON (Alliance News) - The FTSE 100's gains trailed off as Tuesday's session progressed, with
Antofagasta dragging on the blue-chip index as its half-year results disappointed.A lower pound was unable to help the dollar earner-heavy index, as traders digested a mixed UK jobs report as the unemployment rate edged lower in June but wage growth slowed.The FTSE 100 index closed down 0.4%, or 30.81 points at 7,611.64 - having hit an intraday high of 7,665.24 in early trade. The FTSE 250 ended down 0.3%, or 65.35 points, at 20,509.76, and the AIM All-Share closed up 0.3%, or 2.94 points, at 1,087.73.The Cboe UK 100 ended down 0.3% at 12,918.69, the Cboe UK 250 closed down 0.3% at 18,644.62, and the Cboe Small Companies ended 0.2% lower at 12,247.41.The pound spiked briefly after the latest UK jobs data, but this boost for sterling was short-lived as it quickly tumbled below USD1.28 again."Overall the data could be described as mildly positive for the pound, and the currency quickly spiked up to its highest level of the day not long after the release. This seemed to be a bit of a knee jerk reaction to the unemployment figures and the gains have been pared as traders digested the miss in wages," said David Cheetham, chief market analyst at XTB.While the unemployment rate declined to 4.0% in the three months to June from 4.2% a month before, average earnings increased by just 2.4% in the period, slowing from 2.5% the previous month. Earnings excluding bonus, rose 2.7%.The pound was quoted at USD1.2736 at the London equities close Tuesday - having peaked at an intraday high of USD1.2828 immediately after the jobs data - down compared to USD1.2763 at the close on Monday.The euro, meanwhile, stood at USD1.1349 at the European equities close Tuesday, against USD1.1408 at the same time on Monday.The eurozone recorded a 0.4% expansion in the second quarter of 2018 compared to the first quarter, the EU statistical office Eurostat announced.That rate, which is seasonally adjusted, translates into annualized growth of 2.2%. This was above the flash estimate of 2.1%.Despite this higher-than-expected growth for the second quarter, 2018 thus far has been "somewhat of a disappointment", said Bert Colijn senior eurozone economist at ING.Colijn said: "Slower growth in household incomes thanks to higher inflation and only modest wage growth and lower confidence thanks to trade concerns have slowed growth down faster than expected after a spectacular 2017."In European equities on Tuesday, the CAC 40 in Paris ended down 0.2%, while the DAX 30 in Frankfurt ended flat.Stocks in New York were higher at the London equities close, with the DJIA up 0.5%, the S&P 500 index up 0.7%, and the Nasdaq Composite up 0.6%. Shares in Apple were slightly higher, up 0.4%, despite President Recep Tayyip Erdogan warning on Tuesday that Turkey will boycott US electronic goods."If they have iPhone, we have Samsung on the other side," Erdogan said at an event organized by the pro-government think tank SETA in Ankara. "We have Venus, Vestel in our own country," he added referring to Turkish company Vestel Elektronik and the smartphone it produces.Tensions between Turkey and the US have grown over the imprisonment of US pastor Andrew Brunson, who is being tried on espionage and terrorism-related charges.The impasse has hit Turkey's lira, bonds and stock markets. The currency has lost almost 50% of its value since the beginning of the year.Gold continued to trade around its worst levels since March 2017, quoted at USD1,196.85 an ounce at the London equities close Tuesday against USD1,196.00 at the close on Monday.The precious metal is traditionally thought of as a safe-haven asset, boosted by risk-off trade and geopolitical tensions.Fawad Razaqzada, a technical analyst at Forex.com, explained: "Market participants have favoured the likes of the Swiss franc and Japanese yen as their go-to safe haven plays rather than gold and silver. This may be because of the fact the metals pay no interest and cost money to store, especially now at a time when some central banks are turning hawkish and bond yields are on the rise."Brent oil was quoted at USD72.58 a barrel at the London equities close Tuesday from USD72.26 late Monday.Ending as the worst performer in the FTSE 100 on Tuesday was Chilean miner Antofagasta, closing down 7.0% as half-year profit tumbled.Earnings before interest, tax, depreciation, and amortisation fell 16% to USD904.2 million due to higher costs - the Ebitda margin fell to 43% from 53%. Antofagasta's pretax profit for the period was USD465.6 million, down 32% from USD688.6 million a year ago. Looking at the worldwide copper market, Antofagasta said the outlook is "favourable" in the mid to longer term as demand is expected to grow while supply growth is constrained.However, it did caution on the shorter term, saying there is "considerable" market uncertainty due to ongoing international trade disputes.The company is paying a 6.8 cents interim dividend, compared to 10.3 cents a year ago, in line with its 35% net earnings payout ratio.
Royal Mail shed 1.4% as regulator Ofcom slapped the postal operator with a GBP50 million fine for breach of competition law. The regulator said the complaint, made by Royal Mail wholesale customer Whistl, was in relation to changes the FTSE 100-listed firm made to its wholesale contract in early 2014, including price increases.These changes, Ofcom decided, meant competitors such as Whistl had to pay higher prices to deliver post in some parts of the country, causing Whistl to suspend some operations. "The fine - should it be upheld - would have a notable impact on Royal Mail's current year earnings. It accounts for approximately 10% of its forecast adjusted pre-tax profit for the financial year ending 31 March 2019," said Russ Mould, investment director at AJ Bell.In the FTSE 250,
Polypipe climbed to end 5.6% higher as it backed its annual forecasts despite a set of broadly flat interim results.For the six months to June 30, the company posted revenue flat year-on-year at GBP210.2 million, compared to GBP210.0 million. Meanwhile, pretax profit was marginally down to GBP30.1 million from GBP30.5 million the year before.Polypipe said it started trading in the second half of the year well and it is confident that it will deliver results, for the full financial year, in line with management expectations.
Esure added to Monday's sharp 31% gain to close a further 3.9% higher at 277.60 pence on Tuesday on news it has agreed to be taken over in a GBP1.2 billion deal.Under the offer, Esure shareholders will be entitled to receive 280 pence per share, the same as mooted on Monday. The offer represents a premium of 37% to Friday's closing share price of 204 pence, being the last business day prior to the commencement of the offer.The all-cash offer has been unanimously recommended by Esure's independent directors and accepted by its largest shareholder, Chairman Peter Wood, with 30.7%, and second largest shareholder, Toscafund, with 17%.
Elementis gained 2.5% after Berenberg upped its rating on the specialty chemicals company to Buy from Hold.
Card Factory, meanwhile, shed 4.1% as the German bank cut its rating on the cards retailer to Sell from Hold.In Wednesday's corporate calendar, insurer
Admiral Group, support services firm
Balfour Beatty, gold miner
Hochschild Mining and drugmaker
Hikma Pharmaceuticals release half-year results.In the economic calendar on Wednesday is the UK producer and consumer price indexes, both due at 0930 BST. In the US, MBA mortgage applications are at 1200 BST while retail sales are at 1330 BST with second quarter nonfarm productivity due at the same time.Markets in Italy will be closed for the Assumption Day holiday, while markets in France and Germany will remain open as they observe the holiday.
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