FTSE stocks turn lower

Photograph: AFP

Photograph: AFP

Published Jan 18, 2016

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London - British shares turned lower on Monday as worries over a global oversupply of oil and a slowdown in China's economy kept commodities-related stocks under pressure.

Oil and gas stocks retreated after the price of oil slid to its lowest level since 2003 following the lifting of Western sanctions against Iran, with investors concerned about more oil coming on to an already oversupplied global market.

BG Group, Royal Dutch Shell and BP all declined by 0.5 percent to 1.3 percent.

Mining companies were also down, with Anglo American , BHP Billiton and Antofagasta falling between 1.7 and 1.9 percent after JP Morgan cut its target prices on the stocks.

“The poor performance in equity markets reflects concerns about global growth and weak commodity prices. This has been exacerbated by sharp moves in the Chinese equity markets,” analysts at Credit Suisse said in a note.

After opening in positive territory, the blue-chip FTSE 100 index retreated to trade down 0.5 percent at 5 773.99 points, slightly outperforming the broader European market.

“I think it's also fair to say that sentiment remains very much balanced on a bit of a knife edge at the moment,” Richard Hunter, head of equities at Hargreaves Lansdown, said.

Pharmaceutical company Shire rose 0.6 percent after Exane BNP Paribas upgraded it to “outperform” from “neutral”, while satellite communications company Inmarsat was up 0.8 percent following a target price increase from HSBC.

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