THE FTSE 100 ended 2.6 per cent, or 111.88 points, lower at 4,234.05 yesterday as falling commodity prices pressured miners and oil majors.<br /><br />Bucking the trend, <strong>Anglo American</strong> was the biggest blue chip gainer, rising 4.6 per cent, after rival <strong>Xstrata</strong> said it wanted talks about a proposed merger of equals.<br /><br /><strong>Xstrata</strong> shed 6.7 per cent and Lonmin fell 8.1 per cent on speculation that Xstrata could sell its 24.9 per cent stake in the platinum producer as a result of the proposed merger.<br /><br />Oil and gas firms took the most points off the index, after oil prices fell towards $67 a barrel on the back of a strengthening US dollar. <strong>Royal Dutch Shell, BP</strong> and <strong>BG Group</strong> lost between 3.5 and 6.1 per cent.<br /><br />&ldquo;A negative move from oil is proving negative for equities as well and they are very highly correlated at this moment in time,&rdquo; said Angus Campbell, head of sales at Capital Spreads.<br /><br />Softer commodity prices pressured other miners, with<strong> BHP Billiton, Eurasian Natural Resources, Rio Tinto </strong>and <strong>Kazakhmys</strong> shedding between 4 and 7.5 per cent. <strong>Fresnillo</strong> fell 7.5 per cent. The world&rsquo;s largest primary silver producer dropped a hostile takeover offer for MAG Silver.<br /><br />Banks were broadly weaker. <strong>Barclays, HSBC, Standard Chartered, Royal Bank of Scotland</strong> and<strong> Lloyds Banking Group</strong> fell between 1.8 and 4 per cent.<br /><br />Among other FTSE 100 fallers, <strong>British Airways </strong>shed 8.6 per cent after talk that the airline has clashed with its pension fund trustees over a higher-risk investment strategy.<br /><br />Medical equipment manufacturer <strong>Smiths Group </strong>was one of the few stocks in positive territory, rising 3.5 per cent, after Deutsche Bank upgraded its rating for the firm to &ldquo;buy&rdquo; from &ldquo;hold&rdquo; and increased its target price.<br /><br />The large cap index had a slightly different make-up on yesterday as the latest quarterly reshuffle took effect, with <strong>London Stock Exchange, </strong>3i <strong>Group</strong> and <strong>Wolseley</strong> making a return to blue-chip status after one quarter in the mid caps. <strong>LSE</strong> was down 4.1 per cent, <strong>3i</strong> shed 4.3 per cent and <strong>Wolseley</strong> lost 3.7 per cent.