FTSE falls on uncertainty over US election and fall in price of copper
BRITISH blue-chip firms fell yesterday as investors eased back on risky plays ahead of US elections, with miners among the top fallers as they continued to suffer from the low price of copper.
At the close, the FTSE 100 was down 29.490 points, or 0.5 per cent, at 5,839.06, in thin trading volumes of 70 per cent of the average 90-day volume.
“The US election weighs, because clearly the result is still so uncertain. People are really looking for more direction on that front before deciding whether to become more risk-tolerant or not,” Ed Shing, equity strategist at Barclays, said.
Sectors that are exposed to the economic cycle and move with risk sentiment such as banking, mining and energy, took the most points off the FTSE.
Four of the five biggest fallers were miners, with ENRC shedding 3.7 per cent as the price of copper hit two-month lows, reaching 7,609.50 and down nearly 10 per cent in the past seven weeks.
HSBC shaved six points off the FTSE 100, the biggest loss to the index, dropping 1.2 per cent despite a solid earnings update after it said it would need to set aside another $800m (£501m) to cover a potential fine from US regulators for breaches in its anti-money laundering controls in Mexico.
Although HSBC’s earnings saw a fall in bad debts, it also said it would take another $353m charge for mis-selling in Britain, mainly of payment protection insurance.
In all, banks took over 10 points off the index, making it the biggest sectoral drag on blue chip shares.