London Report: Mining shares down on signs of China’s economic weakness

LONDON-listed mining equities fell yesterday as new signs of economic weakness in China, the world’s top metals consumer, prompted investors to dump resources shares at the start of the first full week of 2014.

The UK mining index fell 1.9 per cent, the biggest one-day drop in more than a month, after surveys showed growth in Chinese service sector activity slowed in December, mirroring the trend seen in manufacturing.

“China is slowing down, particularly on the construction and manufacturing side, and that could have a negative impact on the commodity space as China is a huge driver of commodities demand,” Macquarie strategist Daniel McCormack said.

Miner Fresnillo fell 4.7 per cent to be the worst performer on the FTSE 100 index, Antofagasta declined 4.1 percent, and heavyweight Rio Tinto dropped 3.1 per cent after the China data.

However, the blue-chip FTSE 100 index closed flat at 6,730.73 points after a choppy trade, moving in and out of positive territory several times during the day.