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Britain's FTSE under pressure

Thursday, August 07 09:45:51

Britain's top share index slipped on Thursday after insurers reported weaker than expected results, but the market was supported by strong earnings from Rio Tinto.

Financial stocks were the main drag on the index, trimming 7.7 points off the FTSE 100.

The heaviest faller in early deals was Old Mutual, down 2.7 percent after foreign exchange headwinds dampened a headline jump in profit, traders said.

Fellow insurer RSA was also down, falling 2 percent after it outlined the details of its turnaround plan.

Outside of the insurers, investors remained on edge over the possible impact of tit-for-tat sanctions announced by Russia, introduced after the West penalised Russia for its role in supporting pro-Moscow rebels in Ukraine.

The majority of sectors were in negative territory, and although the market had opened steady, volatility, a crude measure of investor fear, ticked up by 4 percent.

The FTSE 100 was down 22.13 points, or 0.3 percent, at 6,613.61 by 0749 GMT, meaning the index has fallen 3 percent over the last six sessions.

The index did receive substantial support from the mining sector, however.

Anglo-Australian miner Rio Tinto rose 2.4 percent after reporting a 21 percent rise in first-half profit on Thursday, beating market forecasts.

The miner slashed capital spending and cut costs faster than expected while ramping up iron ore output, prompting a rise which contributed 4 points to the FTSE 100.

"'World Class' is the line CEO Sam Walsh is using to describe the results and the proof is plain to see," Evan Lucas, analyst at IG said, adding that "the results beat on all major comparisons."

Three quarters of analysts with ratings on the stock believe Rio Tinto is either a "bus" or "strong buy", Thomson Reuters Starmine data showed.

In all, basic materials stocks, including miners, contributed 8 points to the index, with the FTSE 350 mining index up 1.3 percent, the top sectoral gainer. (Reuters)

For more visit: www.businessworld.ie