FTSE closes flat but miners fall to six-year low - London Report

BRITAIN’S top share index closed flat yesterday, weakened by US data and by mining companies hitting multi-year lows.

The FTSE 100 index closed down a tiny 0.007 per cent – or 0.44 points – at 6,550.30.

This followed the release of a survey which showed manufacturing activity in New York state at its weakest level since April 2009.

“The drop in new orders means that the economy is struggling on a forward-looking basis, when expectations were for some improvement,” said Atif Latif, director of trading at Guardian Stockbrokers.

“[We’re] seeing some dollar weakness on the headline but overall the equity weakness on this should be short-lived.”

The FTSE 100 fell 2.5 per cent last week, following a drop in commodity prices after resource-hungry China devalued its currency, leaving the index eight per cent away from an all-time high hit in April.

Shares in mining companies touched a six-year low after the price of copper came under renewed pressure, accounting for around two-thirds of the fall in the overall index.

The sector fell as much as 1.6 per cent, before recovering slightly to trade 0.9 per cent lower.

Mining shares have fallen over 60 per cent since the end of 2010 as global demand for commodities has slowed, culminating in a move by the People’s Bank of China to weaken its currency.

Glencore closed down 1.65 per cent and BHP Billiton declined 1.43 per cent.

Supermarket group Morrisons fell 1.18 per cent after reports that it may sell its 160 M-Local convenience stores.

Shares in Bovis Homes closed down 3.16 per cent, despite the company reporting a rise in half-year profits and saying its house sales hit a record high in the period.

Plumbing supplies firm Wolseley was the biggest riser in the FTSE 100, climbing 2.21 per cent after Citi upgraded its rating on the stock to “buy” from “neutral”.

TUI Travel also rose 1.6 per cent, taking its rally since last week – when it said earnings would come in at the top end of forecasts – to over 12 per cent. Deutsche Bank was the latest to lift its target price on the stock.

TUI, the world’s largest leisure tourism group, is also considering a spin-off of its non-core assets, which have turnover of about €3bn (£1.92bn), the Times newspaper reported yesterday.

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