FTSE 100 trading closed lower on Thursday amid caution over rising U.S. interest rates, with mining stocks leading the decline due to a stronger dollar and lower metal prices.
A third straight session of losses is recorded by the blue-chip, internationally-focused FTSE 100 index (.FTSE) and the midcap index (.FTMC).
The mining group’s shares went ex-dividend as Rio Tinto ( RIO.L ) fell 4.5%. A falling iron ore price and base metal price weighed on the materials sector on Thursday, causing it to close down 3.3%.
In the coming days, investors will be focused on U.S. non-farm payroll data due on Friday, which could provide more insight into how the Federal Reserve will proceed with its monetary policy.
Stocks have declined due to uncertainty about U.S. rates, according to HYCM chief market analyst Giles Coghlan.
Coghlan added, “All eyes are now going to be firmly on the non-farm payroll print on Friday.”
In the face of rising rates, the pound gained 0.6%, limiting gains on the exporter-heavy FTSE 100, which is up more than 6% this year but is down more than 2% from all-time highs hit last month.
There is a 50-50 chance that Bank of England rates will rise from 4% to 5% later this year, despite forecasts that Britain’s economy might avoid a recession.
In the aerospace and defense sector (.FTNMX502010), BAE Systems (BAES.L) rose 1.6% to reach record highs after reports that Australia could pick a British design for upcoming submarines.
Aviva ( AV.L ) shares rose 2.7% after a 35% jump in operating profit after the group announced a 300 million pound ($356 million) share buyback.
In response to a weak 2023 outlook, Domino’s Pizza Group (DOM.L) slid 9% on higher interest costs and technology investments.
