THE FTSE 100 ended a four-day rally yesterday as falling iron ore prices hit mining stocks and trading updates from Royal Mail and testing firm Intertek disappointed investors.
Hit by its heavy weighting in commodity-related stocks, the blue chip index underperformed European peers, dropping 12.53 points, or 0.2 per cent, to 6,696.60 points.
One of the biggest fallers was Icap. The interdealer broker’s shares dropped 10 per cent to 386p after it reported a worse than expected nine per cent fall in first-half revenues, with profits down 38 per cent to £86m due to uncertain trading conditions.
As iron ore prices continued to slide, Anglo American lost 2.93 per cent to 1,323p, Rio Tinto dropped 2.06 per cent to 2,942p and BHP Billiton was down 2.11 per cent to 1,625p.
Among the companies disappointing the market were Royal Mail, down eight per cent to 430p, and testing group Intertek, 7.76 per cent lower at 2,447p. Royal Mail said that Amazon’s plans to deliver more of its own packages would cut its growth in the British parcels market from an annual rate of between four per cent and five per cent to between one per cent and two per cent. Amazon had been Royal Mail’s biggest customer, accounting for six per cent of sales.
Jasper Lawler, analyst at CMC Markets, said: “Amazon just want to expand as quickly as possible, and long-term they will be able to control costs better if they don’t have to rely on a third party like the Royal Mail.”
Pubs groups were on the slide after MPs effectively cut the centuries-old beer tie, with Enterprise Inns plunging 16.65 per cent at 102.60p.
But Severn Trent bubbled up 2.87 per cent to 2,081p as analysts at HSBC moved from underweight to neutral and raised their target price from 1,890p to 2,080p.
Other risers were easyJet, up 1.97 per cent to 1,555p, Meggitt, rising 1.52 per cent to 480.40p, Tesco, improving 1.5 per cent to 195.60, AstraZeneca, gaining 1.33 per cent to 4,747.50p, United Utilities Group, adding 1.22 per cent to 914p, Prudential, up 1.11 per cent at 1,507.50p, Babcock International Group, improving 1.09 per cent to 1,110p and Weir Group, gaining 1.08 per cent to 2,064p.
Other big fallers included Smiths Group, down 1.94 per cent to 1,210p, Persimmon, declining 1.59 per cent to 1,486, Capita falling 1.5 per cent to 1,049p and Next retreating 1.41 per cent to 6,635p.