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Markets: Miners suffer after Fed shockwave

  • by PETER RANSCOMBE
 

CLOSE 5703.77 -134.57

SILVER miner Fresnillo was the biggest faller on the Footsie yesterday as the strong dollar took its toll on precious metal prices.

The dollar was boosted by comments from the US Federal Reserve that further quantitative easing was unlikely, sending a shockwave through commodity markets.

Fresnillo plunged 8.3 per cent or 138p to 1,533p as other miners also took a hit, with Evraz dropping 6.9 per cent or 26p to 353.6p and Antofagasta tumbling 4.3 per cent or 49p to 1,103p.

Glasgow-based engineering firm Weir Group fell in sympathy with its mining sector clients, dropping 4.7 per cent or 84p to 1,705p, despite analysts at Killik & Co issuing a “buy” recommendation on the stock.

The heavily-weighted mining sector dragged down the rest of the FTSE 100 index, which closed off 134.57 points or 2.3 per cent at 5,703.77, obliterating the gains made earlier this week and dipping below the 5,700-mark at one stage.

Michael Hewson, senior market analyst at CMC Markets, said: “The worst performers have been basic resource stocks and industrials as investors pile in to lock in profits on the recent rises seen over the past quarter.”

Financial Times and Penguin publisher Pearson and Plumb Center-owner Wolseley also dragged down the FTSE 100 after going ex-dividend. Pearson was down 4.1 per cent or 48p at 1,136p, while Wolseley fell 116p or 4.8 per cent to 2,322p.

Fashion chain Next was also on the back foot – down 4 per cent or 123p to 2,937p – after it emerged that its chief executive, Lord Simon Wolfson, sold off 125,000 shares.

Fellow retailers Marks & Spencer and B&Q-owner Kingfisher were also down, with M&S 3.6 per cent or 13.8p lower at 370p and Kingfisher falling 12.5p or 4 per cent to 301.3p.

 

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