Reuters: Hot Stocks: Gold miners weigh heavily as Britain's FTSE 100 opens lower

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Gold miners weigh heavily as Britain's FTSE 100 opens lower Aug 7th 2013, 08:16 Wed Aug 7, 2013 4:16am EDT * FTSE 100 down 33.15 points or at 6,571.06 * Randgold hit after QTR profit drops 62 pct * Glencore down on fresh U.S. litigation woes * Old Mutual outperforms as operating profit grows 14 pct By David Brett LONDON, Aug 7 (Reuters) - UK shares opened lower on Wednesday, tracking losses on Wall Street and in Asia and retreating further away from their May peak, with mining shares the worst performers. Weaker metals prices and disappointing earnings hit mining stocks. And shares trading ex-dividend were another weight on the market, taking around 14.4 points off the blue chip FTSE 100, in cautious trade. While many London-listed blue chips rely heavily on earnings from overseas, investors will still be closely watching a news conference by Bank of England Governor Mark Carney on Wednesday on the outlook for domestic monetary policy. UK economic data has been improving and Carney's first big test as governor will be to address how to stop higher borrowing costs from derailing economic recovery. By 0732 GMT, London's blue chip index was down 33.15 points at 6,571.06, but has struggled to make meaningful headway since breaking above the 6,000 level in mid-July. Spredbetter IG Markets said: "The market looks tired and a pullback would be healthy, although on current news flow it's hard to make a case for any more than a 5 percent pullback." The index is about 3.5 percent off the mid-May 6,875.62 peak, the highest level since 2000, and close to its all-time high of 6,950. Volumes remain seasonally low as traders head off for their holidays. "The volumes on down days show that buyers are still looking for sector discounts and we tend to think that the FTSE should consolidate at 6,530/6,550 and then push to 6,880," Atif Latif, director at Gaurdian Stockbrokers, said. The market has already factored in a scaling back at some point of the U.S. Federal Reserve's stimulus programme, which has been a driver of equity market gains in the past year. "Fed action (the month in which it will occur offers room for debate) is priced in and we look now to forward-looking earnings forecasts as the catalyst to see higher equity markets," he said. Miners were the sharpest fallers on Wednesday, in tandem with weaker metals prices. Randgold Resources fell 4.4 percent after the Africa-focused miner posted a 62 percent drop in quarterly profit, hit by the plunging price of bullion. Peer Fresnillo, which reported falling profits on Tuesday, shed 2.8 percent as brokers began cutting targets following the results. Glencore Xstrata slid 2.6 percent after the miner and JPMorgan Chase & Co were hit with a U.S. lawsuit, along with the London Metal Exchange, alleging they artificially inflated aluminium prices. Insurer Old Mutual outperformed the market, rising 4.6 percent after posting a 14 percent jump in first-half operating profits. (Editing by Susan Fenton) Link this Share this Digg this Email Reprints

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