UK shares fall marginally; weak metal prices hurt miners

UK shares fell on Friday, ending two days of gains and taking their lead from weaker U.S. and Asian markets overnight after a hawkish Federal Reserve statement renewed worries about an imminent interest rate hike and weak metals prices weighed.

The FTSE 100 was down 0.6 per cent by 1027 GMT, while the domestically focused mid-cap index was 0.5 per cent lower as negative sentiment on Wall Street and in Asia spilt over across European bourses.

The blue-chip index was on track though for a small gain on the week as it continued to recoup ground lost in October.

As the pace of earnings releases slows, investors focused on news that U.S. Federal Reserve held interest rates as widely expected but indicated it was set for another rate hike in December despite worries about the U.S.-China trade war and political uncertainty.

"Stock markets are lower this morning as fears persist about further interest rate hikes from the Federal Reserve," said David Madden, market analyst at CMC Markets UK.

Falling base and precious metal prices as the dollar strengthened and lingering worries about Chinese demand pushed mining stocks to the bottom of the bourse. Anglo American, Antofagasta, Glencore and BHP Billiton were all down more than 3 per cent.

The sector was down 2.5 per cent, the worst performing industry and on track for its worst day in a month. Weaker oil prices also dragged.

SSE shares fell 3 per cent to their lowest in nearly two months after the energy supplier said it was renegotiating terms with Innogy on a proposed retail energy tie-up, reigniting concerns about the outlook for the UK retail market.

Informa topped the leaderboard, up 2.7 per cent, after confirming it's on track to meet full-year targets and reported 3.9 per cent sales growth in the first ten months of the year.

AA was the second-biggest faller on the mid-cap, down 6 per cent after Credit Suisse downgraded the stock.

(With inputs from agencies.)