FTSE slides lower as commodities and banks hit by economic worries

BRITAIN’S top share index fell yesterday, easing further from four-month highs hit last week, weighed by a slide in banks and commodity stocks as expectations for stimulus measures in China and Europe took a slight knock.

The European Central Bank sought to quash speculation about the shape of its new bond-buying plans and the Bundesbank kept up its opposition to the programme, even after German leader Angela Merkel voiced support for the ECB’s crisis-fighting strategy last week.

British bank shares had initially firmed on reports but later fell, reflecting the sector’s heavy exposure to Eurozone bonds. Global lender HSBC shed 1.2 per cent.

At the close, the FTSE 100 index was down 28.05 points, or 0.5 per cent, at 5,824.37, just holding above the 5,800 level after having reached a session low of 5,802.91.

Commodity stocks were weak in London, tracking falls in Brent crude and copper prices after a rise in Chinese home prices dented investor expectations for further interest rate cuts by China, the world’s largest consumer of commodities.

Among the miners, Xstrata shed 3.4 per cent, with investors cautious ahead of results due today from the miner’s predator, commodities trader Glencore.

Xstrata also suffered from its exposure to Lonmin after a week of violence at the mid-cap platinum miners Marikana mine in which 44 people died. Xstrata owns a 24.6 per cent stake in Lonmin after an aborted bid back in 2008.

Lonmin slid for a sixth day, losing another 4.6 per cent.