Mining Stocks Are Diving In London

London shares opened lower on Tuesday, as mining stocks tumbled further amid worries about the Chinese economy, the world’s second largest.

The benchmark FTSE 100 index fell 42.14 points or 0.66 per cent to 6,358.31 points at 8:40 am.

On Saturday, Beijing reported a sharp slowdown in exports in May from April, while imports unexpectedly dropped owing to weakness in the domestic economy and sluggish demand overseas.

Official data meanwhile showed Chinese industrial production, which measures output at the country’s factories and mines, rose at a slower pace than during the previous month while fixed asset investment also came in below expectations.

“The FTSE continues to drag, weighed down by mining stocks after weekend Chinese data came in below forecasts signalling weak demand in raw materials,” said Lee Mumford, a sales trader at Spreadex.

Fresnillo fell the most in early trade, dropping 2.95 per cent to 1,085 pence, while Evraz shed 2.89 per cent to 121 pence. AngloAmerican fell 2.57 per cent to 1,385 pence and Glencore Xstrata eased 2.35 per cent to 306.90 pence.

The only non-mining stock in the leading decliners was SABMiller, down 2.41 per cent to 3,143 pence. The brewer has big operations in South Africa, where the rand has been weakening sharply, devaluing revenues in sterling terms.

The few FTSE gainers included aircraft engine maker Rolls-Royce, up 1.18 per cent to 1,195 pence, and microchip specialist Arm Holdings, up 1.15 per cent at 879 pence.

Copyright (2013) AFP. All rights reserved.

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