Rio Tinto drags FTSE 100 down

Mining giant Rio Tinto weighed heavily on the FTSE 100 this morning, trading down around 3.5 per cent.

This morning it said chief executive Tom Albanese would step down following a $14bn impairment charge relating to several acquisitions.

Charles Gibson, head of mining at Edison Investment Research, said this morning: “When a company writes off the equivalent of approaching one sixth of its market capitalisation, the chief executive has to carry the can.

“Rio was however until today one of the more stable miners – investors may wonder what else is out there in the sector."

Other miners clustered in the blue chip fallers included Polymetal, Xstrata and Glencore, falling 1.9 per cent, 1.5 per cent and 1.25 per cent respectively.

Fund manager Aberdeen Asset Management sank 1.9 per cent, despite a buoyant trading update this morning, which reported assets under management increased to £193.4bn over the three months to December.

On the wider index, retailer Mothercare sank 3.7 per cent, as it posted a 7.4 per cent drop in third quarter total group sales.

Leading the main share index up was Associated British Foods, which gained 4.56 per cent in early deals on the back of a positive trading update. Group revenue over the 16 weeks to 5 January was 10 per cent ahead of last year, driven by a 25 per cent increase in sales at Primark.

Telecommunications company BT was also ahead two per cent on the FTSE 100 in early deals.

On the wider index, Home Retail – which owns the Argos and Homebase brand – was up by almost 13 per cent in early trading, as it lifted profit guidance on the back of strong Argos sales.

Miner Petropavlovsk rose 4.75 per cent as it hiked its 2013 gold production target on the back of strong output last year.

Banking shares were mainly in positive territory this morning. HSBC rose 0.5 per cent, RBS was up 1.51 per cent, Barclays added 1.23 per cent while Lloyds Banking Group was down 2.85 per cent.