A slump in the share price of mining stocks has weighed on the FTSE 100 as fresh fears over top metals consumer China's growth emerged.
Miners stocks sank by an average of 2% after worries over Chinese growth resurfaced following efforts by authorities to speed up local authority spending in the country in a bid to meet growth targets.
The biggest FTSE 100 fallers were:
- Anglo American (AAL), down 51.5p, or 3.3%, at £14.94;
- Fresnillo (FRES), down 23p, or 2.8%, at 812p;
- Rio Tinto (RIO), down 81p, or 2.5%, at £31.08;
- Randgold Resources (RRS), down 88p, or 2%, at £44.04;
- BHP Billiton (BLT), down 33p, or 1.7%, at £19.08.
Those losses dragged down the FTSE 100, which shed 12 points, or 0.2%, to trade at 6,859.
FTSE 250 stock Fenner (FENR) was a big mover, falling 48.5p, or 12.4%, to 341.2p after the industrial belting producer issued a profit warning. Fenner said profits were likely to be 10% to 15% lower than expected this year due to weak demand from the US coal mining industry and its failure to land a key contract in Australia.
'Whilst some may be tempted to view today's warning as the final downgrade in the cycle, it is worth noting that there is now even more discussion amongst mining commentators that coal miners will now need to cut production to support commodity prices which have fallen heavily,' said analysts at Espirito Santo Investment Bank.
'We are not seeing evidence to support expectation of a reversal of fortunes, particularly in coal markets, over the course of the next 12 months.'
Gold prices have continued to fall after taking a tumble on Tuesday, dropping 0.1% to $1254.5, as worries about geopolitical tensions over the Ukraine fade. 'The political strife 1,500 miles east of here is still serious, but it is being rather overlooked by investors,' said Jonathan Sudaria, dealer at Capital Spreads.
'The lofty equity prices must be down to the world being at such ease at the moment. Economies are pootling along nicely, as are companies; and [US Federal Reserve boss] Janet Yellen seems to have gone on an extended holiday.'