London Report: Fall in copper price hits mining stocks

ADROP in major mining stocks pushed Britain’s benchmark share index lower yesterday, while persistent concerns about an expected reduction in US monetary stimulus also weighed on the market.

The blue-chip FTSE 100 index closed down 0.5 per cent, or 34.26 points, at 6,465.73 points, continuing a pull-back that saw it dip 1.3 per cent last week.

The fall in heavyweight mining stocks took the most points off the index. The FTSE 350 Mining Index shed two per cent as the price of copper fell after three weeks of gains, while miner Glencore Xstrata dropped two per cent on expectations of a write-down on its assets.

The FTSE 100 raced to a 13-year high of 6,875.62 points in late May but has since slipped back, tracking a fall in global equity markets due to expectations that the US Federal Reserve may start to scale back its stimulus measures next month.

The Fed’s monthly bond purchases, which had pushed down bond yields and led investors to seek better returns in equities, have driven much of the global equity rally this year.

However, bond yields have risen over the last month due to growing expectations that the Fed may start to slow the pace of those bond purchases next month.

The FTSE’s biggest faller yesterday was Anglo American, down 55p or 3.55 per cent, to 1,492.50p. The top gainer was Wood Group, up 20p or 2.27 per cent to 903.00p.