Metals meltdown scalds FTSE
A DOUBLE whammy of falling commodity prices and a rising dollar gave mining heavyweights a bashing yesterday as £28 billion was wiped from the value of Britain’s top quoted companies.
The eight biggest blue-chip fallers were all from the mining community as the FTSE 100 Index crashed 115.94 points to 4326.01.
A combination of profit-taking after the recent spike in copper and other metals prices and the rebound in the dollar — making it more expensive for many investors to buy commodities traded in the US currency — hit the sector.
Mexican silver miner Fresnillo softened 48p to 600p, copper producers Antofagasta and Kazakhmys were down 401⁄2p to 633p and 51p to 686p, Eurasian Natural Resources weakened 531⁄2p to 683p while Vedanta Resources and Xstrata lost 115p to 1484p and 54p to 706p respectively.
With crude prices dropping more than 3 per cent to below $70 (£43) a barrel, exploration giants Tullow Oil and Cairn Energy slipped 451⁄2p to 9121⁄2p and 101p to 2358p. Shell reversed 71p to 1609p.
The prospect of lower fuel bills failed to prevent British Airways descending 8p to 1363⁄4p as preliminary traffic figures from the Association of European Airlines suggested Europe’s airlines had suffered a 9 per cent fall last month compared with May 2008.
Tumbling equity prices pushed life insurers Aviva and Prudential 153⁄4p and 181⁄2p lower to 3361⁄4p and 4201⁄2p, while fund manager Schroders was 38p poorer at 8591⁄2p.
Only three of the top 100 listed companies made it into positive territory.
Lloyds Banking Group closed 11⁄2p in the black at 663⁄4p, drugs giant AstraZeneca firmed 21p to 2650p as broker Citigroup turned buyer from its previous hold stance, while insurer Admiral added 61⁄2p to 850p.
Traders cited positive comments from Evolution as investors showed an appetite for sausage maker Cranswick, up 6p to 609p, while council-maintenance contractor Mears Group gained 21⁄4p to 245p as KBC Peel Hunt and Altium Securities talked up the company’s prospects following a well-attended site visit.
Online gaming group PartyGaming was dealt a 11⁄4p winning hand to 262p as broker Morgan Stanley reckoned it would benefit from a more widespread clampdown against the main US-facing poker sites.
Punch Taverns’ huge cash call led to a hangover for fellow pubs group, Enterprise Inns, down 19p to 131p.