Weak commodity stocks undermine FTSE

Britain’s benchmark share index fell back on Friday after a two-day rally earlier in the week, as heavyweight mining stocks were hit by fresh fears over the global economy and traders sold off positions ahead of a possible weekend bailout deal in Spain.

The blue-chip FTSE 100 closed down 0.2 per cent at 5,435.08 points. The index rose 3.3 per cent over the week.

Mining stocks, which had risen sharply over the last two days on hopes of new central bank intervention to help the global economy, fell back and dragged the FTSE lower.

Vedanta was the FTSE’s worst-performing stock, dropping by 5.1 per cent, with rival miner Rio Tinto falling 4.8 per cent on concerns that a lack of clear stimulus measures would hurt the global economy and impact demand for their products.

Utility stocks, often preferred in times of market uncertainty due to their relatively high dividend yields and stable cash flows, were among the best-performing FTSE 100 shares, with Severn Trent and Centrica rising 2.7 per cent and 2.2 per cent respectively.

Outsourcing group Capita led the FTSE’s leaderboard, rising 2.9 per cent after winning a new contract worth some £154m.