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Miners pull London's FTSE 100 lower; Unilever gains

10/21/2021 | 12:19pm

(Reuters) - London's FTSE 100 index fell on Thursday, as miners dropped due to rising troubles in China's property sector and investors fretted about rate-hike prospects, while Unilever was among the top gainers after posting strong quarterly sales growth.

The blue-chip FTSE 100 index ended 0.5% lower, with miners sliding 3.5% on fresh worries about the heavily indebted property developer China Evergrande Group.

Anglo American was among the worst performers on the commodity-heavy FTSE 100 index, falling 2.8% despite reporting a 2% rise in third-quarter overall production.

Other miners Rio Tinto, BHP Group and Glencore were down between 2.4% and 4.2%.

The benchmark FTSE 100 index has gained 11.5% this year, but has underperformed peers in Europe and the United States as rate hike fears, supply chain concerns, post-Brexit jitters and a resurgence in COVID-19 infections continue to hurt the market.

"Investors have turned cautious as some of the earnings have failed to resurrect the confidence as anticipated earlier," said Kunal Sawhney, CEO of Kalkine.

"The extended course of COVID-19 and the subsequent resurgence of infections has materially affected the equity landscape, the primary reason due to which the benchmark FTSE 100 has not recouped the pandemic losses as Dow Industrials or DAX did."

Adding to woes, economists polled by Reuters projected inflation to peak at 4% next quarter, while Britain's health minister Sajid Javid warned that curbs would be brought back if people did not take up vaccination offers as COVID-19 cases begin to rise.

Unilever gained 1.2% after the consumer goods giant beat its third-quarter sales growth forecast and maintained its full-year profit margin outlook. However, its finance chief warned of even higher inflation next year.

The domestically focussed mid-cap index eased 0.1% as weakness in consumer discretionary stocks outweighed strong quarterly earnings.

Engineering firm Renishaw PLC rose 11.7% to the top of the mid-cap index after reporting a nearly 146% rise in profit.

Graphic: UK miners face heat from China Evergrande

(Reporting by Bansari Mayur Kamdar, Shashank Nayar and Amal S; Editing by Subhranshu Sahu and Bernadette Baum)

By Bansari Mayur Kamdar and Shashank Nayar

© Reuters 2021
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