FTSE dragged downwards by mining stocks – London Report
REPORTS of a slowing Chinese economy yesterday hit mining stocks, dragging down the blue-chip FTSE 100 index.
The index closed 0.4 per cent down at 6,352 points, led lower by mining company Anglo American which dropped by 7.37 per cent.
Despite a rally of around five per cent so far in October, the FTSE 100 remains down about 10 per cent from record highs reached in April.
Earlier, data from China was worse than analysts’ expectations, with GDP growing at 6.9 per cent. However, there were still concerns about a slowdown in the world’s second largest economy, which led Glencore to fall 5.17 per cent and Fresnillo to shed 3.29 per cent.
BHP Billiton and Antofagasta ended the session 2.97 and 3.45 per cent lower respectively.
David Buik, a market commentator at Panmure, said: “The slightly worse-than-expected economic data that came out of China… put the mining sector under pressure, which was responsible for half of the 35 point fall in the FTSE 100.”
Also commenting on the markets and data out of China, analyst at CMC Markets Jasper Lawler said: “The rebound in oil and metal prices has supported the rebound in equities but commodities were generally lower [yesterday] following further evidence of the slowdown in China.”
“Given the relatively poor performance of manufacturing, that is probably a reason why… mining stocks have taken a little bit of a dent,” said Laith Khalaf, senior analyst at Hargreaves Lansdown.
Pharmaceutical giant Shire was the biggest riser, finishing the session 2.55 per cent higher.
Shire turned positive in afternoon trade, following a fall after the US Food and Drug Administration declined to approve its dry-eye drug, lifitegrast, and requested an additional clinical study.
Shire’s chief executive said the company still plans a potential 2016 launch for the drug.
“We believe the CRL [Complete Response Letter] was fairly well anticipated by the market, with Shire having been warning of the risk of a delay, pending more clinical data, for the last few months,” analysts at JP Morgan wrote in a note.
Barclays rose 1.5 per cent after Financial Times report that it will speed up the reduction in size of its investment bank.