THE London market sank deeper into the red yesterday after further falls in commodity prices hit traders’ confidence.

The FTSE 100 Index closed 31 points lower at 5944.96, as mining shares followed the falling price of oil and metals and dragged the market downwards.

In the US, the Dow Jones Industrial Average fell 0.1 per cent as worries over declining crude oil prices were compounded by a job cuts warning from communications group Cisco.

The pound was also hit by disappointing manufacturing figures, which came in lower than expected.

Fresnillo was hit by soft silver prices and topped the fallers’ board, down nearly eight per cent or 107p to 1304p, while Antofagasta dropped 47p at 1142p and Vedanta Resources fell 70p to 2095p.

A raft of US economic data failed to lift sentiment, as retail sales posted a below-consensus rise of 0.5 per cent and producer price inflation came in higher than expected at 0.8 per cent.

Oil prices were volatile throughout the session, which saw Petrofac lose 35p at 1449p, BG Group shed 26.5p to 1340.5p and Essar Energy retreat 8.5p to 421.6p.

In corporate results, BT shares were down 2.9p to 199p, despite it reporting a 20 per cent rise in adjusted annual profits to £2.1bn in its full-year results.

British Gas owner Centrica and Scottish & Southern Energy (SSE) defied the slump in commodity prices to feature near the top of a shortened risers board following takeover speculation.

Centrica, up 6.5p at 318.2p, was again boosted by talk that the Qatari Investment Authority may be eyeing a takeover deal, while SSE benefited from a report that Spanish utility giant Iberdrola is mulling an offer.

SSE fed off the improved sentiment in the industry and advanced 17p to 1368p.