LONDON (Reuters) – The UK’s top share index fell back to a two-month low on Wednesday, hurt by renewed weakness in mining stocks and financials, while M&A activity was also in focus.
Britain’s blue chip FTSE 100 index was down 0.1 percent at 7,317.63 points by 1001 GMT, outperforming a negative European market slightly on the back of a weaker pound.
Financials took nearly 9 points off the index, with shares in HSBC, Lloyds and Barclays up to 0.8 percent lower.
They were joined by miners, which extended the previous session’s losses prompted by drops in base metals prices. Rio Tinto, Glencore and BHP Billiton were around 1 percent lower.
Some analysts attributed the falls to profit-taking as the year-end approaches. The FTSE 100 has gained around 2.3 percent so far in 2017.
We’re coming to the end of the year, a lot of equity markets have had a really good 2017, David Madden, market analyst at CMC Markets UK, said.
That big sell-off that we saw in the UK about a month ago, ever since then … we haven’t really got back to where we were. It’s almost like the markets have been rattled by that, Madden added.
Deal-making added some spice at the single-stock level, with shares in Hammerson among the biggest FTSE fallers, down more than 2 percent, after the real estate investment firm said that it would buy shopping centre operator Intu Properties.
Shares in Intu Properties leapt more than 19 percent and were on track for their biggest one-day gain on record.
Given the long-term and significant recent underperformance in Intu’s share price, something had to eventually give, analysts at Liberum said in a note. Intu’s shares were down almost 30 percent ahead of the announcement.
Hammerson has a good track record in delivering operational and financial savings. While competition issues are possible, we otherwise view this as a sensible combination, Liberum added.
Shares in property peers British Land Company and Land Securities also rose 1.6 percent and 1.1 percent respectively.
Among other standout movers, shares in Saga dropped 24.8 percent on the back of a profit warning.
Reporting by Kit Rees; Editing by Hugh Lawson
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