BRITAIN’S leading share index fell yesterday, with energy and mining stocks easing along with commodities on demand worries as downbeat US jobs data last week and euro debt concerns sapped investor confidence.
The FTSE 100 ended down 56.94 points, or 1.1 per cent at 5,069.06, marginally off the session low of 5,040.26, having shed 1.6 per cent on Friday.
“The battle in investors’ minds between promising corporate numbers and concerns over the fragility of global growth is being won by the macroeconomic doubts at the moment,” Jimmy Yates, head of equities at CMC Markets.
Commodities were the main drag as demand fears hit metal prices and crude, after disappointing jobs data from the US and eurozone debt concerns cast a shadow over prospects for global economic growth.
Miners were down along with metal prices as copper hit an eight-month low. Kazakhmys, Eurasian Natural Resources and Rio Tinto shed 2.1 to 4.0 per cent.
Randgold Resources, however, bucked the sector trend, adding 0.9 per cent, with the stock a proxy for the gold price as the price of the metal bounced from lows.
BP pared early gains, falling 0.7 per cent as Goldman Sachs downgraded its rating on the oil major to “neutral” from “buy”.
BP, which has lost around a third of its value since the rig explosion in the Gulf of Mexico last month, said it captured 11,100 barrels of oil from the leaking well with its containment cap in a 24-hour period ending on Sunday.
Peers Royal Dutch Shell and BG Group lost 1.1 and 2.3 per cent respectively, while crude was off 0.8 per cent.
Banks, a gauge of investor attitude towards risk, dropped as sentiment waned. Lloyds Banking Group, Barclays and Royal Bank of Scotland fell 0.9 to 2.7 per cent.
Domestic banks were also weighed on by worries over a levy on British lenders and their exposure to eurozone debt.
British finance minister George Osborne is planning to slap a punishing new tax on banks despite the failure of global finance chiefs to agree on a universal levy on financial firms, the Daily Mail said on Monday.
The eurozone’s debt problems haunted markets after Hungary's government said on Friday the country might suffer a Greece-style debt crisis.
Life insurers were weak , with Legal & General off 2.4 per cent after Deutsche Bank cut its target price in a review of the European life sector, while Prudential fell four per cent as it held its annual general meeting.
In an effort to appease shareholder anger over its failed bid for AIG’s AIA Asian unit, Prudential said in a trading update that its sales in April and May were up 28 per cent.
On the upside, composite insurer RSA Insurance rose 0.6 per cent after Goldman Sachs upped its rating for the firm to “buy” from “neutral”.