Market Report: Footsie hit by falling commodity prices

Falling commodity prices took a chunk out of the Footsie yesterday after weak US economic data hit the prices of copper and other metals.

Shares in Anglo American fell 20p to 1,090.5p, while Glencore and Fresnillo were down 5.4p to 293.3p and 9p to 752p respectively after US industrial production fell for a fifth straight month.

“The market believes there is more to worry about given that recent US data is continuing to miss expectations,” said James Butterfill, global equity strategist at Coutts. “Growth concerns are particularly hurting cyclical sectors such as energy and mining.”

Overall, the FTSE 100 edged towards the 7,000 mark on a quiet Friday, before closing down 12.55 points at 6,960.49. The drinks bottler Coca-Cola HBC initially topped the blue-chip leader board but lost its fizz to close down 25p at 1,391p, despite reporting a strong first-quarter performance in Nigeria, Poland, Romania, Hungary and the Czech Republic.

“The group originally signalled at its full-year results that it expected a €200m [£145m] negative foreign exchange impact this year,” analysts at Credit Suisse said. “Given the rouble’s rally since then, this number should be around 25 per cent lower, we believe.”

Home Retail Group dipped 0.8p to 172.6p as Argos’s swanky new stores failed to cut the mustard with analysts at Espirito Santo.

“We are not sure whether it is possible to judge the outcome of the modernisation/digitisation programme at Argos meaningfully on the basis of information made available at this relatively early stage,” they said.

“But with the benefit of witnessing past reinvention attempts, we feel uneasy about the way this is going.”

The oil giant Shell fell 29p to 2,026p. Peter Ward, a dealer at London Capital Group, said: “The shares continue to drift after going ex-dividend this week, while two rigs for the newly approved Arctic project have arrived in Seattle in the north-west of the US. The oil major is expecting heavy protests in and around Seattle as environmental activists look to disrupt [the project].”

Among other sharp movers, ITV rose 4.7p to 262p, with JP Morgan, Barclays and Bernstein all raising their target prices for the stocks.

“We continue to see ITV as a well-managed company that executes their business plan very well,” analysts at Barclays said in a note.