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Mining rout hits FTSE as China exports plunge
Big drop in exports from China, the world's top metals consumer, snaps recovery rally for mining stocks, sending FTSE 100 lower.
Update: Mining stocks have weighed on the FTSE 100 after a big drop in exports from China, the world's top metals consumer, spooked investors.
The UK blue chip index fell 49 points, or 0.8%, to 6,131, with mining stocks registering heavy falls on news that Chinese exports tumbled 25.4% in February, a much bigger fall than investors had been expecting.
'While some of the decline may well be down to the timing of Chinese New Year, the fact that the number missed expectations by such a long way does raise concerns that global demand could be much weaker than people realise,' said Michael Hewson, chief market analyst at CMC Markets UK.
Mining stocks littered the bottom of the FTSE 100, giving up some of the gains from a strong recovery rally since hitting 12-year lows in mid-January.
Glencore (GLEN) tumbled 16.4% to 142.8p, Anglo American (AAL) slumped 13.9% to 541.2p, Rio Tinto (RIO) lost 8.7% to trade at £20.44, Antofagasta (ANTO) shed 9.7% to 535p and BHP Billiton (BLT) was down 7.8% at 827.1p.
'The sharp decline in economic activity over the past month rather belies the recent rebound being seen in commodity prices,' said Hewson.
'The biggest fallers are the mining stocks unsurprisingly given recent strong gains with Anglo American and Glencore leading the fallers into a very large sinkhole, as they reverse the gains of the last two days.'
Miners were joined at the bottom of the index by Worldpay (WPG), down 6.3% at 273.5p, as investors shunned the payments processing company on its decision not to pay a dividend.
But luxury goods maker Burberry (BRBY), which relies on China for a substantial proportion of its business, shrugged off concerns over the world's fastest-growing economy. Its shares jumped 5.8% to £14.50 on reports the company was seeking help to defend itself from a potential takeover bid.
Shares in Tesco (TSCO) also rose, up 2.4% at 196.4p after data from market researchers Kantar Worldpanel showed the supermarket's decline in sales was starting to slow.
Among 'mid cap' stocks, Close Brothers (CBRO) slumped 6.4% to £12.95 as analysts cut their rating on the stock following first-half results.
On the FTSE Small Cap index, Brammer (BRAM) suffered its worst day in 10 months, down 16.6% at 181p, as the industrial maintenance company posted a 15.1% drop in full-year profits.
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Look up the shares
- Anglo American PLC (AAL.L)
- BHP Billiton PLC (BLT.L)
- Antofagasta PLC (ANTO.L)
- Rio Tinto PLC (RIO.L)
- Glencore PLC (GLEN.L)
- Burberry Group PLC (BRBY.L)
- Tesco PLC (TSCO.L)
- Close Brothers Group PLC (CBRO.L)
- Brammer PLC (BRAM.L)
- Worldpay Group PLC (WPG.L)
- BP PLC (BP.L)
- Royal Dutch Shell PLC (RDSb.L)
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by Gavin Lumsden on Sep 30, 2016 at 17:23