views

Mining and energy stocks drag the FTSE lower for the fourth day in a row

BRITAIN’S top share index closed lower yesterday for a fourth straight session, dragged down by miners and energy stocks on continued market unease over the uncertain demand outlook.

The FTSE 100 closed down 0.8 per cent, or 42.68 points at 5,260.31, having ended 0.6 per cent lower on Friday, pressured by financial issues following President Barack Obama’s proposals to limit the size and activities of US lenders.

Energy stocks took the most points off the index, with crude below $75 a barrel, with investors concerned over possible tighter Chinese monetary policy.

Cairn Energy, Royal Dutch Shell, BP and BG Group lost 0.8 to 1.4 per cent.

“Until the Chinese authorities decide how to address their overheating – what measures will they pursue? Will they increase interest rates? – I think it is difficult to see where the market is going to go,” Tim Whitehead, investment manager at Redmayne-Bentley said.

He added: “If the Chinese move to quell economic growth, the knock-on effect is lower demand for raw materials, hence the mining stocks and the oil companies generally have been weaker.”

Against a backdrop of mixed metals prices, miners were also in the doldrums. Eurasian Natural Resources, Xstrata and Anglo American dropped 1.9 to 2.3 per cent.

European Union regulators opened an antitrust investigation yesterday into a planned iron ore production joint venture between BHP Billiton and Rio Tinto worth $116bn.

BHP and Rio were off 1 per cent and 2.2 per cent, respectively.

Pharmaceuticals, which fared relatively well last week, lost ground. AstraZeneca, GlaxoSmithKline and Shire fell 0.1 to 2.1 per cent.