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Britain’s top share index retreated early on Friday and looked set for a third consecutive week of losses as persistent concerns about the outlook for major industrial metals hit mining shares.
News that BP will face a maximum fine of $13.7 billion for its Gulf of Mexico oil spill, several billion less than feared, pushed the stock up 1.9 per cent, however, making it the index’s top gainer.
The blue-chip FTSE 100 was down 0.4 per cent at 6,475.22 points by 0839 GMT after gaining 1.7 per cent in the previous session.
The mining sub-index was down 0.7 per cent and among the biggest sectoral decliners after gaining on Thursday as investors crowded into safe-haven gold after the Swiss National Bank’s shock decision to end its cap on the franc.
Rio Tinto, BHP Billiton and Antofagasta all fell 0.9 to 1.1 per cent.
“Comments from the IMF and growing concerns for deflation are overshadowing the miners,’’ Hargreaves Lansdown equity analyst Keith Bowman said.
“With an imminent ECB policy announcement highly anticipated, volatility in markets near term looks assured.’’
International Monetary Fund chief Christine Lagarde had said on Thursday that cheap oil and a stronger US economy were unlikely to brighten the outlook for global growth this year. The World Bank has also cut its growth forecasts this week.
After Thursday’s market turmoil, investors are awaiting a European Central Bank policy meeting next week at which the ECB is widely expected to say it will start buying government bonds with new money.
Many interpreted the decision to scrap the Swiss franc’s three-year-old cap against the single currency as a sign the SNB is anticipating just such a tide of euros.
Chartists remained bearish on the benchmark FTSE 100 index, which is down 1.4 per cent so far this year after falling 2.7 per cent in 2014.
“The downtrend in the FTSE remains intact and a weakness today will push it to its third consecutive weekly decline,’’ Bill McNamara, technical analyst at Charles Stanley, said.
“That’s a compelling reason for remaining cautious.’’
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