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FTSE slips from highs as gold miners lose lustre
December 12, 2016 / 5:05 PM / a year ago

FTSE slips from highs as gold miners lose lustre

(ADVISORY- Follow European and UK stock markets in real time on the Reuters Live Markets blog on Eikon, see cpurl://apps.cp./cms/?pageId=livemarkets)

* Blue-chip FTSE 100 ends 0.9 pct lower

* Capita and Polymetal among top fallers

* Energy stocks track strong oil prices

By Alistair Smout

LONDON, Dec 12 (Reuters) - Britain’s top share index slipped on Monday after gaining in the previous five sessions in a row, with outsourcing group Capita extending its recent losses and precious metals miners tracking a fall in gold prices to 10-month lows.

Capita fell for a third straight day and closed 5.3 percent lower after a profit warning late last week and its decision to sell its asset management business left analysts questioning the British outsourcing group’s strategy.

Russian gold and silver miner Polymetal slumped 4.7 percent after RBC cut its rating on the stock to “sector perform” from “outperform” and as gold prices slipped to a 10-month low on expectations of a U.S. rate hike this week.

“Polymetal remains an industry-leading precious metals company ... However, with increasing gold price volatility, high levels of 2017 capex and a higher (free-cash flow) breakeven price than peers we downgrade to Sector Perform,” RBC said.

Fellow precious metals miners Randgold and Fresnillo fell 1.4 percent and 3.3 percent respectively.

The blue-chip FTSE 100 touched a fresh one-month high in early deals, before surrendering gains and closing 0.9 percent lower.

Banks also slipped as some investors took profits after recent sharp gains. The sector index was down 2.4 percent, dragged down by a 3.3 percent fall in HSBC and a 2.4 percent weaker Barclays.

Losses were capped by a 1.6 percent surge in the oil and gas index after oil prices rose more than 6 percent to an 18-month high after OPEC and some of its rivals reached their first deal since 2001 to jointly reduce output to try to tackle global oversupply and boost prices.

Oil majors Royal Dutch Shell both rose about 1.5 percent.

“The OPEC deal made two weeks ago hinged on the non-OPEC members also agreeing to cut production - many members of OPEC had stated that they would only agree to cut production on the basis the non-members also agreed,” said James Hughes, chief market analyst at GKFX.

“The agreement puts the issue of a global oil glut to rest, but only for now.”

Shares in Sky fell 2.8 percent after seeing a record gain of nearly 27 percent on Friday after a $14 billion takeover bid from Twenty-First Century Fox.

The stock pulled back as shareholders and analysts said the offer represented a “low-ball” bid, with one major shareholder set to reject the offer. Fellow broadcaster ITV dropped 3.3 percent. (Additional reporting by Atul Prakash; Editing by Catherine Evans)

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