Hike in commodity costs hits miners and energy stocks

Britain&rsquo;s top share index fell 1.4 per cent yesterday as sagging commodity prices dented miners and energy stocks, while reduced risk appetite hurt banks.<br /><br />The FTSE 100 ended down 74.43 points at 5267.70, its biggest daily fall for three weeks, after closing 0.1 per cent lower on Wednesday.<br /><br />Miners were the biggest drag on the index as metal prices were pressured by a stronger dollar as the demand outlook darkened.<br /><br /><strong>Eurasian Natural Resources, Xstrata, Rio Tinto, Antofagasta, Anglo American </strong>and<strong> Vedanta Resources</strong> fell 3.1-5.1 per cent.<br /><br />The mining sector is still up 95 per cent this year compared to a 19 percent gain for the FTSE 100.<br /><br />An already weak market retreated further after <strong>Bank of America-Merrill Lynch</strong> cut its 2010 growth outlook for the bellwether semiconductor industry, sending US equities deep into negative territory.<br /><br />In Britain, the Office for National Statistics said the public sector had a net cash requirement of &pound;5.9bn last month, nearly twice expectations.<br /><br />The ONS also said retail sales rose 0.4 in October, slightly below forecasts of 0.5 per cent.<br /><br />&ldquo;There&rsquo;s been a bit of a reality to check, but to be honest I though it would have kicked in sooner ... We&rsquo;ve reached dizzying heights. It appears this market sees every dip as a buying opportunity,&rdquo; said Philip Gillett, sales trader at <strong>IG Index</strong>.<br /><br />The banking sector was generally lower. Europe&rsquo;s largest bank <strong>HSBC</strong> shed 1.3 per cent. <strong>Barclays, Standard Chartered </strong>and<strong> Royal Bank of Scotland </strong>fell 0.9-2.8 per cent.<br /><br /><strong>Lloyds Banking Group </strong>gained 0.4 per cent supported by news the previous session that the bank had received approval from Europe for state aid for its planned restructuring.<br /><br />Energy stocks also lost ground as crude slipped below $78 per dollar. <strong>Royal Dutch Shell, Cairn Energy, Tullow Oil </strong>and<strong> BP</strong> were down 1.3 to 1.7 per cent.<br /><br />The world number two brewer <strong>SABMiller</strong> bucked the weak market trend, up 3.4 per cent, to be the top riser after saying it expected a second-half boost from currency movements , after price rises and cost cuts pushed up its first-half profit. <br /><br />British household cleaning goods group <strong>Reckitt Benckiser</strong> added 1.1 per cent on reports of a link-up with US peer <strong>Colgate Palmolive</strong>, but analysts were sceptical of an immediate tie-up. <br /><br />Gas and electricity transmission network operator <strong>National Grid</strong> gained 0.9 per cent after it forecast a strong year on the back of low costs.