LONDON MARKETS: FTSE 100 Ends Lower As Rio Tinto, Standard Chartered Shares Slump

By Carla Mozee and Victor Reklaitis, MarketWatch Features Dow Jones Newswires

Construction activity at weakest in nearly a year

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U.K. stocks closed lower Wednesday, with commodity shares in the red aftermining heavyweight Rio Tinto PLC posted underlying earnings that fell short of expectations.

Standard Chartered PLC's downbeat news about dividends prompted a selloff in the lender's stock, adding to the pressure on the market's blue-chip barometer.

The FTSE 100 lost 0.2% to end at 7,411.43, erasing part of Tuesday's climb of 0.7% (http://www.marketwatch.com/story/ftse-100-marches-higher-as-bp-rolls-royce-shares-advance-2017-08-01).

Standard Chartered (STAN.LN) said it's not ready to begin paying dividends again (http://www.marketwatch.com/story/standard-chartered-dividends-remain-suspended-2017-08-02), but that it will reconsider at the end of the year. Shares were yanked down 6.1% for the FTSE's biggest loss. The Asia-focused bank, which has been working on resetting its business after a slowdown in growth, posted an increase in first-half profit and revenue.

Shares of rival Asia-focused bank HSBC Holdings PLC (HSBA.LN) finished down less than 0.1%. That lender this week said it would launch another $2 billion in share buybacks (http://www.marketwatch.com/story/hsbc-to-launch-2-billion-buyback-as-profit-up-57-2017-07-31) after second-quarter profit leapt 57%.

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Resource stocks: Rio Tinto shares (RIO) (RIO) (RIO) fell 2.8%, suffering the FTSE 100's third-biggest loss. The iron ore producer's first-half underlying earnings rose to $3.9 billion, but that was below a Thomson Reuters consensus estimate of $4.19 billion. Rio did say it will buy back a further $1 billion in shares (http://www.marketwatch.com/story/rio-tinto-ups-buyback-plans-as-profit-jumps-2017-08-02) and that debt has been reduced.

Other mining shares traded lower, with iron ore miner BHP Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) down 1.1%. Glencore PLC (GLEN.LN) shares fell 1.2%, and copper miner Antofagasta PLC (ANTO.LN) gave up 1.4%.

Other stock movers: RSA Insurance Group PLC (RSA.LN) fell 0.5% even as the company said first-half earnings rose to GBP196 million (http://www.marketwatch.com/story/rsa-insurance-profit-up-amid-restructuring-2017-08-02)($259 million), aided by its restructuring program.

BAE Systems PLC shares (BA.LN)(BA.LN) flipped down 2.7%. Shares had been up about 3% after the weapons maker posted a 11% increase in first-half underlying earnings before interest, taxes and amortization to GBP945 million.

Off the FTSE 100, shares of William Hill PLC (WMH.LN) rallied 6.1%. The British bookmaker's profit rose in the first half (http://www.marketwatch.com/story/william-hill-profit-rises-sees-progress-in-2017-2017-08-02), and the FTSE 250 component struck an optimistic tone about progress for the year.

Economic data: Construction activity in July marked in its weakest performance since August 2016, with IHS Markit/CIPS construction PMI coming in at 51.9 in July. That widely missed the 54.3 estimate from a FactSet survey of economists.

Lower volumes of commercial building and slower housing-activity expansion hit the index. As well, a reduction in new business volumes hurt job creation and input buying, according to the survey.

But the pound eventually drifted higher after the report, trading hands at $1.3233 compared with $1.3205 late Tuesday in New York.

Read:Confusion reigns for investors ahead of Bank of England's 'Super Thursday' (http://www.marketwatch.com/story/confusion-reigns-for-investors-ahead-of-bank-of-englands-super-thursday-2017-08-01)

(END) Dow Jones Newswires

August 02, 2017 12:08 ET (16:08 GMT)