Miners peg back FTSE as UK inflation dips again
Miners pegged the FTSE 100 back in early trading as fears that demand from China for metals was falling sapped investor confidence.
BHP Billiton, the world’s biggest miner, fell 1.9 per cent after saying it was seeing signs of “flattening” iron ore demand from China.
The sector is pinning its hopes on continuing fast growth in the global economic powerhouse.
However, a string of data has suggested that the breakneck speed at which the country is expanding its economy has slowed.
Meanwhile investors were also eyeing figures which showed that inflation in the UK continued to fall in February mainly due to cuts in gas and electricity charges.
Consumer Prices Index (CPI) inflation fell to 3.4 per cent in February, down from 3.6 per cent in January, according to the Office for National Statistics (ONS).
On London’s blue chip index miner Fresnillo dropped by 2.9 per cent while Rio Tinto was off by 2.5 per cent. Randgold Resources dipped by 2.3 per cent Kazakhmys lost 2.1 per cent.
Banks – many of which have signed up to a £20bn credit scheme to help small businesses – also showed weakness.
Lloyds Banking Group was off by a shade over one per cent and Barclays 1.2 per cent. RBS weakened by around one per cent while HSBC – which has declined to take part in the credit scheme – was down by a similar level.
On the up side telecoms giant Vodafone edged up by 1.6 per cent after reports that it could be in line for a tax payout.
iPhone chipmaker Arm Holdings was up just over one per cent after upgrades by Barclays Capital and Investec.
National Grid put on just over one per cent after announcing a plan to build a carbon capture facility – to harness green energy – with oil services heavyweight Petrofac.
Hotel and pub chain Whitbread saw a 0.9 per cent lift while retailer Tesco was 0.8 per cent to the good.
FTSE 250-listed retailer Debenhams was up one per cent after reporting a half-year sales rise despite the tough consumer climate.
In Asia the Nikkei closed up 0.1 per cent while the Hang Seng was down by just over one per cent.