U.K. stocks slipped from record highs on Tuesday, as a recent mining rally cooled even after better-than-expected manufacturing data from China.
What are markets doing: The FTSE 100 index UKX, -0.35% fell 0.2% to 7,676.97, easing back from the all-time closing high scored on Friday, the last trading session of 2017. The London benchmark logged a 7.6% gain for the full year, for its second straight year of advances.
The pound GBPUSD, +0.4518% rose to $1.3555, up from $1.3502 late Monday in New York, largely due to broad-based dollar weakness.
What’s driving the market: Mining companies are taking a breather on Tuesday after last week’s rally. Those gains came after copper prices extended their winning streak into a 16th straight session.
Shares of miners lost ground even after upbeat Chinese factory activity data out on Tuesday that showed the manufacturing sector’s expansion in December was stronger than expected. The Caixin China manufacturing purchasing managers’ index rose to 51.5 in December from 50.8 in November, beating forecasts of a 50.7 reading.
The U.K. manufacturing PMI is due at 9:30 a.m. London time, or 4:30 a.m. Eastern Time.
The U.K. market was further squeezed by the stronger pound. As around 75% of revenues for the FTSE 100 are made overseas, an appreciation in sterling hits profits when converted back into the U.K. currency.
Stock movers: Among miners, shares of Rio Tinto PLC RIO, -2.21% RIO, +0.32% RIO, +0.91% dropped 1.9%, Antofagasta PLC ANTO, -1.87% fell 1.6%, and BHP Billiton PLC BLT, -1.78% BHP, -0.84% BHP, +0.37% lost 1.4%.
Shares of Compass Group PLC CPG, -0.28% gave up 0.7% after news the contract caterer’s chief executive, Richard Cousins, had died in a plane crash in Australia.
International Consolidated Airlines Group SA IAG, +1.41% added 0.4%. The British Airways parent said late Friday it is buying the assets of Austrian carrier Niki, an arm of defunct Air Berlin.
BP PLC BP., -0.46% shares lost 0.5%. Earlier Tuesday, the energy giant said it expects recent changes to U.S. corporate taxes to boost its future earnings, but added that it will take a one-off $1.50 billion non-cash charge due to the revaluation of deferred tax assets and liabilities.