FRESH concerns over demand from China weighed on mining stocks and dragged Britain’s top share index lower yesterday, with investors bracing for a series of meetings that could pave the way for further central bank stimulus.
The FTSE 100 closed down 24.08 points, or 0.4 per cent, at 5,719.45, in volumes just 58 per cent of their 90-day daily average.
The volumes reflected the fact that many investors were still on their European summer vacation as well as their cautious view on taking on more risk with meetings in the US and Europe set to test their nerves.
Mining stocks slid 2.6 per cent amid fresh worries over the prospects for Chinese economic growth and a further drop in the price of steelmaking ingredient iron ore, languishing at near 3-year lows.
China said it is prepared to buy more EU government bonds amid a worsening European debt crisis that is dragging on the world economy.
Ukraine-focused iron ore producer Ferrexpo topped the list of fallers, losing more than 10 per cent at one stage to hit its lowest level since November 2009.
Miners are not the only companies struggling in the current climate. WPP fell 1.6 per cent after nudging down its full-year outlook. And concerns over its outlook saw motor insurer Admiral shed 2.8 per cent, prompting Shore Capital to cut its earnings expectations for the firm.
Wm Morrison Supermarkets, however, topped the FTSE 100 leaderboard, up 1.5 per cent with traders citing a read across from French peer Carrefour’s results.
Reflecting investor caution, most of the risers on the index were defensive share.