LONDON MARKETS: Commodity Stocks Pull FTSE 100 Toward Fifth Straight Decline

By Carla Mozee, MarketWatch Features Dow Jones Newswires

Stocks in the U.K. fell Wednesday, heading for a fifth straight loss, as a slide in oil prices pulled energy producer shares lower. Elsewhere in commodities, a drop in metals prices knocked down prices for miners.

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After a disappointing reading on inflation Tuesday, investors are focused on U.K. wages figures due later, likely to play a part in the Bank of England's deliberations on the path of interest rates.

What markets are doing: The FTSE 100 index dropped 0.4% to 7,383.17. The basic materials, gas sectors and financial sectors fell by the most. But the telecom and utility groups moved higher. On Tuesday, the London benchmark fell less than 1 point (http://www.marketwatch.com/story/ftse-100-aims-to-break-losing-streak-as-tesco-vodafone-bounce-higher-2017-11-14), enough to log a fourth consecutive decline.

The pound traded at $1.3179, up slightly from $1.3165 late Tuesday in New York. Against the euro, sterling bought EUR1.1152, not far off from EUR1.1158 in the prior session.

The yield on the 10-year gilt was down 2 basis points to 1.291%.

Commodities pressure: Prices for oil and most metals were under pressure, which in turn weighed on shares of energy producers and mining companies.

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Oil prices slumped 1% Wednesday, extending losses logged Tuesday after the American Petroleum Institute posted an unexpected rise in weekly U.S. inventories for both crude oil and gasoline (http://www.marketwatch.com/story/api-data-reportedly-shows-an-unexpected-jump-in-us-crude-supplies-2017-11-14).

Thomas Kee: To make money in oil, listen to prices more than news (http://www.marketwatch.com/story/to-make-money-in-oil-listen-to-prices-more-than-news-2017-11-14)

Copper prices gave up 0.7%, building on Tuesday"s fall. That move came after disappointing Chinese data on industrial output (http://www.marketwatch.com/story/china-industrial-output-slows-in-oct-as-expected-2017-11-13) and housing sales (http://www.marketwatch.com/story/china-housing-sales-slow-year-over-year-in-october-2017-11-13) prompted concerns about slowing growth the world's second-largest economy.

The oil and gas and basic materials sectors have a 24% weighting on the FTSE 100, according to FactSet data.

What's moving markets: U.K. and European stocks were tracking losses for futures for the Dow Jones Industrial Average and the S&P 500 . U.S. stocks have been rattled by concerns about delays to tax reforms from Washington. Republican senators are strongly considering adding a repeal of Obamacare's individual insurance mandate (http://www.marketwatch.com/story/senate-republicans-strongly-consider-adding-obamacare-mandate-repeal-to-tax-bill-report-2017-11-14) to a new version of their tax bill, Politico reported.

Read:Here's what happens if Obamacare mandate is repealed, as Senate is considering (http://www.marketwatch.com/story/heres-what-happens-if-obamacare-mandate-is-repealed-as-senate-is-considering-2017-11-14)

Meanwhile, investors will watch for wages and jobs data from the Office for National Statistics, scheduled for release at 9:30 a.m. London time, or 4:30 a.m. Eastern Time.

Analysts polled by FactSet are looking for weekly average earnings to have risen 2.1%, excluding bonuses, and 2%, including bonuses, in the three months to September. The unemployment rate is forecast to hold steady at 4.3%.

What strategists are saying: "The average weekly earnings growth could have eased to 2.1% from 2.2%. Soft wages growth means that Bank of England will need to stay accommodative for longer. Dovish BOE expectations could weigh on the pound along with ... Brexit shenanigans," said London Capital Group's senior market analyst Ipek Ozkardeskaya in a note.

Stock movers: Shares of oil producers Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) and BP PLC (BP.LN) (BP.LN) shed 1.4% and 0.8%, respectively, as oil prices lost ground.

Among miners, Glencore PLC (GLEN.LN) shares were 2.5% lower, Rio Tinto PLC (RIO) (RIO) (RIO) gave up 2.2%, and Anglo American PLC (AAL.LN) erased 2.1%. But Fresnillo PLC (FRES.LN) managed to move up by 2.2%.

Barratt Developments PLC (BDEV.LN) shares fell 1.4% even as the home builder said total forward sales rose 8.4%, indicating a strong start to the new financial year (http://www.marketwatch.com/story/barratt-developments-sees-strong-start-to-new-year-2017-11-15).

(END) Dow Jones Newswires

November 15, 2017 04:30 ET (09:30 GMT)