UKX FTSE 100 Index

By Carla Mozee, MarketWatch

Bunzl raises dividend payment; mortgage approvals hit 18-month low

Stocks in the U.K. wobbled Tuesday, with mining shares struggling on dollar strength at the start of the holiday-shortened week.

The FTSE 100 was up 2 points at 6,841.20 after opening with a minor loss. Trading was closed Monday for the late-August bank holiday.

The index on Friday rose 0.3% (http://www.marketwatch.com/story/ftse-100-slips-but-miners-find-relief-after-selloff-2016-08-26) after Federal Reserve Chairwoman Janet Yellen indicated the U.S. economy looks ready to withstand higher interest rates.

While a stronger U.S. economy should be supportive for global growth overall, the FTSE 100 on Tuesday was "held back by a strong dollar, with the fallers' board looking like a who's who of mining firms," said IG market analyst Joshua Mahony in a note.

In the mining group, shares of copper producer Antofagasta PLC (ANTO.LN) dropped 4.4%, Randgold Resources PLC (RRS.LN) lost 4.2% and iron ore miner Rio Tinto PLC (RIO) (RIO) (RIO) gave up 3.8%.

"The devaluation of gold, silver, copper and iron ore in the wake of Friday's dollar rally is expected to provide a drag for days to come, with only crude prices remaining surprisingly resilient amid something of a bloodbath for commodity stocks," he said.

A higher dollar makes dollar-denominated commodities more expensive for holders of other currencies to purchase.

Precious-metal producer Fresnillo PLC (FRES.LN) shed 3.5% and Glencore PLC (GLEN.LN) was off 2.9%, adding to last week's loss of 1.9% after the miner and commodities trader posted a $369 million half-year net loss (http://www.marketwatch.com/story/glencore-steps-up-debt-cuts-as-it-swings-to-loss-2016-08-24).

Oil prices were higher but shares of oil majors were mixed. BP PLC (BP.LN) was down 0.3% while Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) rose 0.4%.

Shell said Monday it reached a deal to sell certain assets in the Gulf of Mexico for $425 million to EnVen Energy Ventures LLC, an affiliate of Houston-based EnVen Energy Corp..

As the dollar advanced, the pound was trading at $1.3096, down from $1.3113 late Monday.

Housing: Shares of home builders turned lower after the Office for National Statistics said the number of new mortgages approved in the U.K. fell in July to 60,912, the lowest level in more than a year. (http://www.marketwatch.com/story/uk-mortgage-approvals-at-lowest-in-18-months-2016-08-30)

Taylor Wimpey PLC's stock (TW.LN) fell 1.7%, Berkeley Group Holdings PLC (BKG.LN) was off 1.6%, Persimmon PLC (PSN.LN) was pushed 1.5% lower and Barratt Developments PLC (BDEV.LN) slipped 0.3%.

The British housing market has "not seized up by any means ... but there are signs the Brexit vote has exerted a severe shock," wrote Neil Wilson, markets analyst at ETX Capital.

"Prices have so far held up pretty well but this decline in approvals suggests this situation may not last, particularly as the unemployment rate is expected to tick upwards and a weak pound hits people in their pockets," he said.

But holding the top spot on the FTSE 100 was Associated British Foods PLC (ABF.LN) , as shares rose 2.3%. RBC raised its rating on ABF, which runs sugar operations and the retailer Primark, to outperform from sector perform.

Bunzl PLC (BZLFY) shares rose 1.4% after the maker of coffee cups and mops raised its interim dividend payment (http://www.marketwatch.com/story/bunzl-reports-rise-in-first-half-profit-2016-08-30) and posted a 6% rise in first half pretax profit of GBP155.6 million ($203.88 million).

(END) Dow Jones Newswires

August 30, 2016 07:04 ET (11:04 GMT)

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