Mining stocks drag FTSE 100 down; energy stocks gain for fifth day

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By Khushi Singh and Lisa Pauline Mattackal

(Reuters) -The UK’s benchmark FTSE 100 edged lower on Thursday, with losses in mining shares offsetting another strong day for energy companies, while Britain’s biggest supermarket group Tesco climbed after raising its annual profit forecast.

The blue-chip FTSE 100 index was down 0.1% while the mid-cap index FTSE 250 eased 0.2%.

Heavyweight mining shares lost ground, with indexes tracking industrial miners and precious metal miners down 1.2% and 0.3%, respectively.

Prices of industrial metals like copper slipped on worries about ongoing conflict in the Middle East, a stronger U.S. dollar and some uncertainty about the demand impact of stimulus measures in China.

Gold also lost ground as the dollar strengthened as markets reassesed the likelihood of another 50 basis point Federal Reserve rate cut.

Oil and gas shares jumped 1.4%, extending gains for a fifth consecutive session, as crude prices rose on expectations that a widening Middle East conflict could disrupt supply. [O/R]

Meanwhile, Bank of England Governor Andrew Bailey said there was a chance the central bank could move more quickly to cut interest rates if there is further good news on inflation.

Rate sensitive homebuilding stocks rose 1.3% after his comments.

The S&P Global UK Services Purchasing Managers Index dropped to 52.4 in September, from 53.7 in August, with prices charged rising at the slowest pace in almost four years. Inflation in the services sector is closely watched by the BoE.

Markets have all but priced in a 25 bp cut from the BoE in November.

Meanwhile, Tesco shares climbed 2.5% after the supermarket group raised its profit guidance for the year and reported a 10% increase in first-half core profit.

Insurer Phoenix Group was the biggest FTSE 100 decliner, falling 5.7%.

(Reporting by Khushi Singh in Bengaluru; Editing by Mrigank Dhaniwala, Kirsten Donovan)