Mining stocks cause FTSE 100 climbdown

Mining stocks cause FTSE 100 climbdown

	Published : Wed, 08 Mar 2006 09:05 By : Richard Owen Print this Story

LONDON: The FTSE 100, which climbed to a four-and-half year high Monday, lost 38.7 points to slide to 5859 Tuesday as copper prices fell and equity markets worldwide got concerned over a further hike in U.S. interest rates. All European markets were impacted as Wall Street was dominated by sell-offs.

Mining stocks were the most affected as they took 9 points off the index. BHP Billiton was down 2.3 per cent, closing at 934.5 pence, Antofagasta lost 2.1 per cent at 2021 pence and Kazakhmys down 33.5 pence at 855.5p. The decline was sparked by a 2 per cent fall overnight in the copper price.

Other mining stocks too did not escape the pressure to sell. Rio Tinto was down 59 pence at 2,630 pence and Anglo American shed 80 pence at 2,050p. Among the second rung stocks, Lonmin lost 110 pence to reach 2,200 pence and Vedanta Resources shed 50 pence to 1,069 pence.

Some traders believe that China, the world's top steel producer, had imposed price caps on iron ore imports to contain a rise in 2006 term prices, which are under negotiation with miners.

The decline, however, did not affect the sentiments of futures traders, who said the pattern in recent times has been for a sell-off at the start of the week, and a buying spree towards the later part of the week, compensating the loss.

Metal traders say there is nothing fundamentally wrong with the market and it should strengthen as the demand situation from China and India remained unchanged.

Energy stocks like BP and Shell too were under pressure, possibly in response to the 2 per cent reduction in the U.S. crude prices. BP lost 3.5 pence at 633.5 pence, while Shell lost 6 pence at 1,819 pence.

In the telecoms sector, BT, which has been subject of a buyout speculation, fell 1.2 percent.

Lloyds TSB, which is also said to be a takeover target, was down 3.75 pence to 543.25 pence.

There were a few winners in an otherwise grim market. Anglo-Dutch household goods firm Reckitt Benckiser gained 35 pence to reach 2,062 pence and publishing group Pearson 16 pence to 751 pence. The latter was spurred by news that its Penguin subsidiary is a favourite to get publishing rights for Alan Greenspan's memoirs.