UK shares drifted further on Tuesday from last week’s record high, weighed down by weakness among mining stocks and ConvaTec, while British mid caps were also under pressure ahead of Thursday’s general election. The blue-chip FTSE 100 inched 0.1 percent lower to 7,517.73 points by 0924 GMT, while the more domestically-exposed mid-cap index dropped 0.8 percent to a two-week low.
Large caps came under pressure for the second session in a row as sterling continued its climb to hit a 12-day high as investors bet on a win for the ruling Conservative party in the election. A stronger pound tends to weigh on the FTSE 100’s more internationally-facing constituents.
“We’re seeing some mixed messages from polls, some would suggest that big gap between the Conservatives and the Labour party is narrowing. Now that we’re seeing that, people are unsure,” David Madden, market analyst at CMC Markets, said.
“(With) some of the recent polls muddying the waters, (investors) are using that to bank some profits and play the wait and see game.” Medical technology firm ConvaTec was the biggest individual faller, down nearly 5 percent after two investors sold a higher stake via a placing.
Luxury goods firm Burberry was also down 2.7 percent after HSBC cut its rating on the stock to “reduce” from “hold”, citing a lack of visibility on the top line.
“Every shareholder-friendly initiative seems to have been looked at to enable Burberry shares to be protected in the absence of what, in our view, would be the only real solid booster: a sustainable rebound in sales growth,” analysts at HSBC said in a note.
Miners also added pressure to the index, with names such as Antofagasta, Anglo American and BHP Billiton declining between 0.8 percent to 1.7 percent as the price of copper eased. Among mid caps, AO World dropped 6.6 percent and hit its lowest level since July 2016 after the online retailer warned of a significant slowdown in UK sales growth in the first quarter.