MORE weakness among mining firms dragged the FTSE 100 Index lower yesterday, as supermarket Sainsbury’s caught investors off-guard with a surprise fundraising.
The retailer led the fallers for much of the session following the £445m exercise, but weaker metal prices and a stronger dollar meant most of the damage was done by the heavyweight miners.
The FTSE closed 50.1 points down at 4278.5 – the first finish below its recent floor of 4,300 since the beginning of May.
Brighter economic news also failed to boost sentiment, despite a slower than expected rise in UK unemployment, while Bank of England minutes also highlighted ‘‘encouraging’’ signs of potential recovery.
IG Index’s Anthony Grech said: ‘‘With the key psychological support level of 4300 breached, traders will now be bracing themselves for a further slide.’’ With US markets virtually flat in early trading, miners led the London market lower as the sector’s difficult run continued.
Xstrata was the leading faller, nursing a ten per cent loss of 73p to 643.5p, despite a broker upgrade. It was closely followed by Lonmin and Kazakhmys – off 110p to 1191p and 54p to 628.5p respectively – as miners littered the fallers board.
They were joined by Sainsbury’s, which fell 18.75p to 313p, despite another impressive recent trading performance, with like-for-like sales up 7.8 per cent for the first quarter of its financial year. Shares were diluted by the fundraising move.
The risers board was again led by telecoms after BT extended its positive run into a second session, following an upgrade from broker Morgan Stanley.
BT advanced 3.1p to 105.6p, although it was beaten to top spot by mobile phone giant Vodafone.
The firm added 4.25p to 118.95p after reports it was close to a tie-up in Germany with rival Deutsche Telecom.
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