FTSE 100 weighed down by mining stocks as metal prices decline
London’s blue chip index was also suffering amid a “worldwide decline in equities”.
The FTSE 100 fell into the red on Wednesday as global equity markets stumbled and falling metal prices weighed on major mining stocks.
London’s blue chip index ended the day down 0.56% or 41.81 points at 7,372.61 points, with the likes of BHP Billiton down 21p at 1,366.5p, Glencore down 4.85p to 349.9p and Anglo American down 17.5p to 1,437.5p.
David Madden, a market analyst at CMC Markets UK, said: “Mining stocks like Rio Tinto, Glencore, Vedanta, and BHP Billiton are in the red as metals like zinc, steel and nickel are weaker as fears that China is slowing down is weighing on investor sentiment.
“The latest industrial production, fixed asset investment, retail sales and housing sales out of China point to an economy that is cooling.”
Across Europe, the French Cac 40 and German Dax fell 0.27% and 0.44% respectively.
Mr Madden said it was part of a “worldwide decline in equities”.
“Adding to the sell-off in eurozone stocks is the pop … in the euro.
“The single currency has had a good run in the past two days on account of the solid growth numbers from Germany yesterday, and the firmer inflation report from France today,” he added.
Sterling was relatively flat against both the euro and US dollar, at 1.116 and 1.316 respectively.
UK data released on Wednesday showed that the number of people in work has fallen by 14,000, marking the biggest reduction in more than two years, while average earnings increased by 2.2% in the year to September, down by 0.1% on the previous month and by 0.3% on a year ago.
Employment was just over 32 million in the quarter to September after the largest three-monthly fall since April-June 2015.
The unemployment rate currently stands at 4.3%, according to the Office for National Statistics (ONS).
Brent crude prices jumped 0.9% to $62.10, recovering from an earlier decline sparked by Energy Information Administration data that showed a rise in US crude inventories.
In UK stocks, Premier Foods jumped 2.25p to 38.75p as the Ambrosia custard and Bisto gravy maker narrowed its half-year pre-tax loss to £1.2 million from £8.7 million a year earlier, after securing a hefty jump in sales from its international business.
TalkTalk shares tumbled 11.3p to 178.2p, making it the worst performer on the FTSE 250, after the telecoms group swung to a half-year loss of £75 million and warned over profits as it took a hit from efforts to secure more customers.
Housebuilder Crest Nicholson fell 22.8p to 496.2p, while industry peer Barratt Developments dropped 7p to 622p despite both firms insisting that buyer demand was strong.
But investors focused on signs that sales were slowing and prices were weakening in the central London market.
Game Digital fell 1.63p to 38.5p as the company reported a £10 million annual loss compared with profits of £1.1 million a year earlier, after a difficult first half.
The company said that the success of Nintendo Switch was helping drive its turnaround.
The biggest risers on the FTSE 100 were Fresnillo up 42p to 1,325p, Bunzl up 31p to 2,146p, BT Group up 3.4p to 247.15p, and Barclays up 1.7p to 182.4p.
The biggest fallers on the FTSE 100 were NMC Health down 103p to 2,750p, 3I Group down 31.5p to 898.5p, Mondi down 55p to 1,721p, and WPP down 37p to 1,253p.