– Bloomberg News
Commodity Slump Leaves U.K. Stocks Among 2014?s Worst
Plunging energy and mining shares have dragged the FTSE 100 Index (UKX) down with them, making investors in U.K. stocks among 2014?s biggest developed-market losers.
A five-year low in oil combined with slowing demand for industrial metals means the FTSE 100 will see little relief, said Ashcourt Rowan Plc?s Stephen Walker. Bets that the benchmark gauge will retreat further cost the most in three years relative to bullish options, one-month options data show.
Weighed down by BP Plc (BP/) and BHP Billiton Ltd., the FTSE 100 has dropped 5.5 percent in 2014, on track for its worst year since 2011, while the Euro Stoxx 50 Index was little changed. An outlook for Britain?s economy to grow almost four times faster than the rest of Europe has done little to stem an exodus from London-listed stocks with exposure to global growth.
?What?s clouding the FTSE 100 now will still be here for some time,? said Walker, Ashcourt Rowan?s London-based head of equities research. His firm oversees about $8.3 billion. ?It?s not a very diversified index, and that really limits any upside. We?re still pretty negative on most of the metals, and it doesn?t look like OPEC is going to reduce oil supply any time soon. These stocks are cheap, but the question is whether they offer any value.?
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