View the article online at http://citywire.co.uk/money/article/a576134
Miners' fears over Chinese growth drag FTSE down
BHP Billiton (BLT.L) and Rio Tinto (RIO.L) executives expect weaker iron ore demand from China as economic growth slows.
The cautious outlook on metal demand saw miners become the worst performing stocks on the FTSE 100.
Carsten Fritsch, commodities analyst at Commerzbank, said: ‘They [BHP and Rio] believe that both steel production and demand for iron ore will lose momentum. In future, they expect the latter to see "only" single-digit growth.
‘These statements should be seen in the context of the lower growth target set by the Chinese government, and in our view should not come as any great surprise to the market. Both companies anticipate a “soft landing” in China, with solid growth continuing.’
In Tuesday trade Fresnillo (FRES.L) lost 89p, or 5%, to £16.87; Rio Tinto shed 150p, or 4.2%, to £34.64; Anglo American (AAL.L) dropped 107.5p, or 4.1%, to £25.05; and BHP Billiton fell 83p, or 4%, to £19.65.
Oil prices fall on Saudi Intervention
Oil prices fell more than $2 a barrel following intervention from Saudi Arabia to ease prices. The move came amid fears that soaring costs may hamper an economic recovery.
Brent crude for delivery next month fell 1.1% to $124.33 per barrel and West Texas Intermediate crude for next month delivery lost 1.63% to hit $106.33.
UK inflation, measured by the consumer price index (CPI), fell back 0.2% to 3.4% in February to reach its lowest levels in 15 months. The drop missed economists’ forecasts and may result in the Bank of England taking further measures to boost the economy.
The benchmark UK index of blue-chip shares lost 1.17%, or 70 points, to 5,891 and the Mid-250 index shed 0.19%, or 153 points, to 11,633. See the FTSE's performance.
Other stock markets in Europe also suffered: Germany’s DAX index fell 1.39% to 7,055, France's CAC 40 index dropped 1.32% to 3,531, and the FTSEurofirst 300 index of top European shares fell 1.12% to 1,093.
In the US weaker-than-expected housing starts were reported, with 0.7 million new builds beginning in February, lower than the 0.71 million reported in January.
The Dow Jones Industrial Average slid 0.51% to 13,172, the Standard & Poor's 500 index lost 0.47% to 1,403, and the Nasdaq Composite index fell 0.61% to 3,060.
News sponsored by:
From Brazil and Mexico, to Vietnam and Nigeria, the rapidly developing economies of Latin American and frontier markets, which are some of the smaller, less developed economies in the world, provides investors with a wealth of potential opportunities. Discover why BlackRock's investment trust range is well placed to help you make more of these exciting regions.
More about this:
Look up the shares
- Fresnillo PLC (FRES.L)
- Rio Tinto PLC (RIO.L)
- Anglo American PLC (AAL.L)
- Bhp Billiton PLC (BLT.L)
- Vodafone Group PLC (VOD.L)
- AstraZeneca PLC (AZN.L)
- Unilever PLC (ULVR.L)
- Red Emperor Resources NL (RMPq.L)
More from us
Tools from Citywire Money
From the Forums
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add firstname.lastname@example.org to your safe senders list so we don't get junked.