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FTSE flat as Turkey crisis takes a breather

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FTSE flat as Turkey crisis takes a breather
A worker shelters from the rain under a Union Flag umbrella as he passes the London Stock Exchange in London, Britain, October 1, 2008. REUTERS/Toby Melville/File Photo   -   Copyright  Toby Melville(Reuters)
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By Julien Ponthus

LONDON (Reuters) – UK shares were flat on Tuesday morning as the Turkish lira pulled back from record lows, providing investors temporary respite in a currency crisis that has rattled global markets since August 10.

The FTSE 100 <.FTSE> opened up 0.3 percent but gave up most of its gains after data showed Britain’s wage growth had slowed even though unemployment fell unexpectedly to its lowest since 1975.

“Despite the resilience of the data, the inability of wages to show any signs of pushing up from their current levels, continues to act as a significant imponderable”, wrote Michael Hewson from CMC Markets.

“This is likely to make the calculus around another rise in interest rates much more difficult”, he added.

At 0847 GMT, the British blue chip index was flat (up 0.03 percent), while the pan-European STOXX 600 rose 0.4 percent.

Shares in Antofagasta <ANTO.L> posted the worst performance after reporting first half core earnings fell 16.2 percent versus a year earlier.

The Chilean copper producer cited weaker ore quality and higher costs and said trade tensions clouded the broader market outlook.

Goldman Sachs analysts called the numbers “a disappointing set of results” and said they expected Antofagasta to underperform the market during the trading session.

London copper was falling for a third straight session after data showed the Chinese economy was cooling, suggesting demand from the world’s top copper consumer could slow. [nL4N1V51I0]

Anglo-Australian mining giant BHP <BLT.L> was down 0.1 percent after the union at the copper mine of Escondida in Chile, called off a strike planned to start on Tuesday.

Other miners were trading in the red, including Fresnillo <FRES.L>, down 1.5 percent, Rio Tinto <RIO.L> and Glencore <GLEN.L>, both down 1 percent.

Oil major and heavyweight Royal Dutch Shell <RDSa.L> also took a few points from the FTSE 100 with a 0.3 percent loss.

Esure <ESUR.L> continued to rise towards the buy-out price of 280 pence per share set in Bain Capital’s 1.21 billion pound offer.

The UK insurer was up 3.9 percent at 227.8 pence.

“The fact that the offer was all-cash also pleased shareholders. And with shares trading around 277p this morning, investors appear to have almost completely bridged the gap”, commented Artjom Hatsaturjants from Accendo Markets.

(Julien Ponthus, Editing by William Maclean)

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