UKX FTSE 100 Index

By Carla Mozee, MarketWatch

Miners fall as tariffs continue to cast a cloud; Just Eat downgraded to sell

U.K. blue-chip stocks struggled to find the momentum on Monday to build on a five-session win streak, failing to follow U.S. equities higher after a well-received U.S. jobs report.

The benchmark FTSE 100 had started higher alongside other global equity stock markets. But mining shares proved a drag, as the industry wrestles with the prospect of U.S. tariffs on steel and aluminum.

How markets are moving

The FTSE 100 index was down 0.1% at 7,215.00, led by losses for the basic materials group. On Friday, the index rose 0.3% (http://www.marketwatch.com/story/ftse-100-struggles-after-trump-signs-tariff-order-2018-03-09) and finished last week higher by 2.2%, for its first weekly win in three weeks.

The pound bought $1.3876, up from $1.3848 late Friday in New York.

What's driving markets

U.K. stocks, like European equities , initially moved higher at the open, with investors apparently still in an upbeat mood after the latest U.S. monthly jobs figures.

Global stock markets logged gains on Friday after February's nonfarm payrolls report showed the U.S. economy added more jobs than expected (http://www.marketwatch.com/story/us-adds-313000-jobs-in-february-in-biggest-gain-in-a-year-and-a-half-2018-03-09), but wage growth missed forecasts. That signaled a healthy U.S. economy but eased fears that wages would add to inflationary pressures. Many London-listed companies count the U.S. as a key market.

Asian stock markets jumped Monday, while U.S. stock futures (http://www.marketwatch.com/story/us-stock-futures-higher-with-wall-street-set-to-extend-last-weeks-gains-2018-03-12) were gaining ground.

But the FTSE 100 lost a tight grip on those initial gains, struggling to stay positive as mining stocks moved lower. Miners are feeling the weight of U.S. President Donald Trump's order last week to impose protectionist tariffs of 25% for steel and 10% for aluminum. The mining group makes up about 87% of the weighting in the basic-materials sector on the FTSE 100.

Read:EU lines up its salvos to fight Trump tariffs (http://www.marketwatch.com/story/eu-lines-up-its-salvos-to-fight-trump-tariffs-2018-03-08)

See:ECB's Draghi: 'If you put tariffs against your allies, one wonders who the enemies are' (http://www.marketwatch.com/story/ecbs-mario-draghi-if-you-put-tariffs-against-your-allies-one-wonders-who-the-enemies-are-2018-03-08)

Deal news was on the radar in London, as Melrose Industries PLC raised its buyout offer for engineering company GKN PLC.

What strategists are saying

"The 313,000 additional [U.S.] jobs took economists and markets by surprise. Although employees may not like the 0.1% rise in average hourly earnings, employers liked it and markets loved it," said Hussein Sayed, chief market strategist at FXTM.

"This is simply because the modest increase in wage growth indicates that the Federal Reserve will continue to have some sort of slack in the labor market to deal with and thus keep the Fed on course for three rate hikes in 2018 instead of four," Sayed said in a note.

Stock movers

GKN (GKN.LN) rose 1.6% after Melrose Industries (MRO.LN) lifted its purchase offer to 8.1 billion pounds (http://www.marketwatch.com/story/melrose-raises-gkn-offer-to-81-billion-2018-03-12) ($11.2 billion), but said it won't raise the amount again "under any circumstances." GKN, which has spurned Melrose's previous bids, said on Friday it is merging its driveline business with Dana Inc. (DAN) in a deal worth $6.1 billion.

Just Eat PLC (JE.LN) shares fell 4.3% after Deutsche Bank downgraded its rating of the online-food delivery services company to sell from hold.

Among mining shares, iron ore producers Rio Tinto PLC (RIO) and BHP Billiton (BLT.LN) each shed 1.2%, while Glencore PLC (GLEN.LN) lost 0.7%.

(END) Dow Jones Newswires

March 12, 2018 05:50 ET (09:50 GMT)

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