British shares drop as lockdowns strain mining stocks; AstraZeneca weighs

Shashank Nayar and Amal S
·2 min read

By Shashank Nayar and Amal S

(Reuters) - London listed shares ended lower on Wednesday, led by a decline in mining shares as a surge in virus cases and movement curbs raised demand worries, while Fresnillo slumped after the precious metals miner predicted lower gold production.

The blue-chip FTSE 100 index fell 1.3%, with miners and construction stocks falling the most, while AstraZeneca was the top drag to the index, falling nearly 2.2%.

"There were a few positive factors last year that helped to push equity markets higher, but that energy seems to be fading with rising virus cases and lockdowns being a drag on investor sentiment," said Craig Erlam, an analyst at Oanda.

British Prime Minister Boris Johnson indicated the COVID-19 lockdown in England would last until March 8, and was set to announce new tougher border measures to stop new variants of COVID-19 getting into the country.

Mining heavy-weights Rio Tinto and Anglo American also weighed on the FTSE 100, while zinc prices fell to their lowest in more than two months as stockpiles climbed and demand in top consumer China weakened. [METL/]

British retailers slipped 0.3% after reporting the biggest annual drop in prices since May, adding to signs of pressure on the sector.

The mood further dampened as Britain's death toll from the coronavirus pandemic passed 100,000.

The FTSE 100 has recorded consistent monthly gains since November on expectations of a vaccine-led recovery, but it has lost steam as extended lockdowns and worries of vaccine roll-outs hit business activity.

Tullow Oil dropped 12.2% even after the oil exploration company forecast its operating cashflow to reach $500 million in 2021, if the oil price stays above $50 a barrel.

Fresnillo Plc tumbled 13% after forecasting lower gold output for the current year than pandemic-hit 2020, mainly after a land slip at one of its mines in Mexico restricted operations.

(Reporting by Shashank Nayar in Bengaluru; Editing by Arun Koyyur, Sherry Jacob-Phillips and Alex Richardson)

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