Natural resource companies continue to weigh on FTSE

Mining giants weighed on the FTSE 100 for the second day in a row on Tuesday as the prices of commodities weakened further.

The index closed down 0.3%, losing 17.77 points and ending at 7,175.7.

It comes a day after the index managed to avoid a fall despite a poor showing for the natural resource sector.

The same companies, including Glencore and Rio Tinto, performed poorly again on Tuesday. The share prices of BP and Shell also took hits as oil prices fell.

By the time markets were closing in London traders could buy a barrel of Brent crude oil for around 100 dollars. That was more than 6% down.

“The prospect of tighter monetary policy and the ongoing war in Ukraine continue to weigh on markets,” said Chris Beauchamp, chief market analyst at online trading platform IG.

“A weaker start to the day has at least been mostly reversed for European indices, including the FTSE 100, but for now these markets remain stuck below last week’s highs as bullish momentum stalls.

“Weaker commodity prices haven’t helped, dragging on the likes of Glencore and Antofagasta, while fears about a wider lockdown in China have hit markets as well.

“A more optimistic view still looks like a tough ask, especially given tomorrow’s Fed decision, always a good reason for traders to keep their powder dry.”

Markets elsewhere in Europe had been hit. The Dax in Germany was down 0.1%, while the Cac 40 closed 0.2% lower in Paris.

On Wall Street things looked much rosier. The S&P 500 had gained 1.7% by the time markets closed in Europe, its neighbour the Dow Jones was up 1.5%.

On currency markets the pound lost 0.16% and could buy 1.3046 dollars shortly after European markets closed. It gained 0.06% against the euro, buying 1.1917.

In company news Imperial Brands, the tobacco company behind Rizlas, said it was selling its Russian assets, adding to the list of firms pulling out of the country.

Shares in the business rose 0.6%.

Shares in Inchcape, a car dealership, slipped 2.1% when it also announced its plans to leave the country due to the Kremlin’s unprovoked war against Ukraine.

Meanwhile HSBC said it would shut 69 bank branches in the UK as customers choose to bank online instead of in person. The move will hit around 400 workers, but the bank hopes it can redeploy these staff.

Shares in the bank fell 2%.

The biggest risers on the FTSE 100 were Pearson, up 58.6p to 819.6p, Reckitt, up 117p to 5,813p, Informa, up 10.03p to 650.23p, Relx, up 35p to 2,168p, and National Grid, up 18.2p to 336.6p.

The biggest fallers on the FTSE 100 were Polymetal, down 30p to 138.6p, Fresnillo, down 35p to 686.7p, Standard Chartered, down 22p to 469.2p, Prudential, down 44p to 1,000.5p, and Glencore, down 19p to 462.4p.