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FTSE dragged lower by mining stocks

Friday, August 22 17:03:33

Britain's top equity index slipped off three-week highs today, with mining stocks among the worst performers as weak metals prices weighed on the sector.

The blue-chip FTSE 100 index closed down by 2.41 points - flat in percentage terms - at 6,775.25 points. The London stock market is closed for a public holiday on Monday.

Gold and silver miner Fresnillo was the worst-performing FTSE 100 stock in percentage terms, falling 1.8 percent as the price of gold remained stuck near a two-month low.

Traders pointed to a dovish tone in a speech on Friday by U.S. Federal Reserve Chair Janet Yellen as limiting the stock market's losses.

Yellen said the Fed should move cautiously in determining when interest rates should rise.

Nevertheless, equity traders remained on the backfoot, with tensions in Ukraine weighing on stock markets.

Ukraine declared that Russia had launched a "direct invasion" of its territory after Moscow sent a convoy of aid trucks across the border into eastern Ukraine, where pro-Russian rebels are fighting government forces.

The FTSE 100 hit a peak of 6,894.88 points in mid-May, its highest level since December 1999, but the market has since given up much of that ground due partly to worries over conflicts in Ukraine and also in Iraq.

Basil Petrides, sales trader at Beaufort Securities, said investors could be tempted to sell out and book profits if the FTSE could not break above previous highs in the 6,830-6,890 points range set in the last two months.

"If it does not take out those previous highs, then it could lead to a minor pullback," he said.

Others were a bit more positive on the FTSE's prospects, with the UK stock market buoyed by Britain's gradual economic recovery and a pick-up in corporate takeover activity.

For more visit: www.businessworld.ie