London Markets: Commodity stocks pull FTSE 100 toward fifth-straight decline

Stocks in the U.K. fell Wednesday, heading for a fifth straight loss, as a slide in oil prices pulled energy producer shares lower. Elsewhere in commodities, a drop in metals prices knocked down prices for miners.

After a disappointing reading on inflation Tuesday, investors are focused on U.K. wages figures due later, likely to play a part in the Bank of England’s deliberations on the path of interest rates.

What markets are doing: The FTSE 100 index UKX, -0.60% dropped 0.4% to 7,383.17. The basic materials, gas sectors and financial sectors fell by the most. But the telecom and utility groups moved higher. On Tuesday, the London benchmark fell less than 1 point, enough to log a fourth consecutive decline.

The pound GBPUSD, +0.0152% traded at $1.3179, up slightly from $1.3165 late Tuesday in New York. Against the euro, sterling GBPEUR, -0.3674%  bought €1.1152, not far off from €1.1158 in the prior session.

The yield on the 10-year gilt TMBMKGB-10Y, -3.01%  was down 2 basis points to 1.291%.

Commodities pressure: Prices for oil CLZ7, -1.26% LCOF8, -1.33%  and most metals were under pressure, which in turn weighed on shares of energy producers and mining companies.

Oil prices slumped 1% Wednesday, extending losses logged Tuesday after the American Petroleum Institute posted an unexpected rise in weekly U.S. inventories for both crude oil and gasoline.

Thomas Kee: To make money in oil, listen to prices more than news

Copper prices HGZ7, -0.64%  gave up 0.7%, building on Tuesday’’s fall. That move came after disappointing Chinese data on industrial output and housing sales prompted concerns about slowing growth the world’s second-largest economy.

The oil and gas and basic materials sectors have a 24% weighting on the FTSE 100, according to FactSet data.

What’s moving markets: U.K. and European stocks SXXP, -0.94%  were tracking losses for futures for the Dow Jones Industrial Average DJIA, -0.13%  and the S&P 500 SPX, -0.23%  . U.S. stocks have been rattled by concerns about delays to tax reforms from Washington. Republican senators are strongly considering adding a repeal of Obamacare’s individual insurance mandate to a new version of their tax bill, Politico reported.

Read: Here’s what happens if Obamacare mandate is repealed, as Senate is considering

Meanwhile, investors will watch for wages and jobs data from the Office for National Statistics, scheduled for release at 9:30 a.m. London time, or 4:30 a.m. Eastern Time.

Analysts polled by FactSet are looking for weekly average earnings to have risen 2.1%, excluding bonuses, and 2%, including bonuses, in the three months to September. The unemployment rate is forecast to hold steady at 4.3%.

What strategists are saying: “The average weekly earnings growth could have eased to 2.1% from 2.2%. Soft wages growth means that Bank of England will need to stay accommodative for longer. Dovish BOE expectations could weigh on the pound along with … Brexit shenanigans,” said London Capital Group’s senior market analyst Ipek Ozkardeskaya in a note.

Stock movers: Shares of oil producers Royal Dutch Shell PLC RDSB, -1.31% RDS.B, -0.12%  and BP PLC BP., -1.25% BP, -0.68%  shed 1.4% and 0.8%, respectively, as oil prices lost ground.

Among miners, Glencore PLC  GLEN, -3.45% shares were 2.5% lower, Rio Tinto PLC RIO, -2.12% RIO, -2.44% RIO, -2.79%  gave up 2.2%, and Anglo American PLC AAL, -2.68%  erased 2.1%. But Fresnillo PLC FRES, +1.87%  managed to move up by 2.2%.

Barratt Developments PLC BDEV, -0.56%  shares fell 1.4% even as the home builder said total forward sales rose 8.4%, indicating a strong start to the new financial year.

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