By Shashwat Chauhan and Khushi Singh
(Reuters) – UK’s FTSE 100 closed lower on Wednesday, weighed down by weak earnings from miner Rio Tinto and the exit of NatWest Group’s CEO, with investors also cautious ahead of an expected Federal Reserve interest rate hike later in the day.
The blue chip index lost 0.2% ending a six-day winning streak, while the more domestically focussed FTSE 250 midcap index was up 0.2%.
NatWest Group was the worst performing FTSE 100 stock, falling 3.7% after CEO Alison Rose stepped down with immediate effect after admitting a “serious error of judgment” in discussing the bank’s relationship with former Brexit party leader Nigel Farage with a BBC journalist.
“NatWest is no ordinary bank, it is still almost 40% owned by the UK taxpayer, and the political and regulatory ramifications of this episode are likely to ripple out for months to come,” commented Danni Hewson, head of financial analysis at AJ Bell in a note.
London-listed shares of Rio Tinto lost 3.1% after slashing its interim dividend and reporting its lowest first-half underlying earnings in three years.
The broader industrial metal miners were the day’s biggest losers as the sector shed 2.6%, also hit by receding expectations of demand growth from top consumer China.
Later in the day, the Fed is widely expected to hike rates by 25 basis points, while the Bank of England will announce its decision on interest rates next week.
Heavyweight energy stocks dropped 0.5% as oil prices fell. [O/R]
Lloyds Banking Group , Britain’s biggest mortgage lender, fell 1.7% after missing half-year profit expectations.
The UK banks index slipped 0.5%.
Rolls-Royce soared 21.2%, to hit its highest level in over three years after the aero-engineering company raised its full-year operating profit forecast.
The aerospace and defence sector closed at record high, up 5.3%
(Reporting by Shashwat Chauhan and Khushi Singh in Bengaluru; Editing by Eileen Soreng, Sohini Goswami and Shailesh Kuber)
