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MONDAY MARKET CLOSE: Mining stocks put brakes on rally hopes

  • by SCOTT REID
 

A downbeat mining sector put the brakes on hopes for a sustained shares rally that might build on gains seen at the end of last week.

Instead the benchmark FTSE 100 Index struggled for momentum as it climbed just 7.49 points to 6,559.48, following a boost on Friday sparked by positive US jobs data that helped the top-flight end a five-session losing streak.

But there seemed little enthusiasm for more increases, despite better-than-expected Chinese export data. Imports to the world’s second biggest economy missed expectations, pushing miners near the top of the fallers’ board.

The Footsie remains up by around 11 per cent since the start of 2013. However, in spite of its broad upwards trajectory, the index has failed to rise back to a 13-year peak of 6,875.62 reached in late May.

David Madden, market analyst at IG, said: “Mineral extractors are suffering as falling metal prices underline how weak global demand is. A drop in non-manufacturing from China and additional cash injections from the People’s Bank of China are worrying signs.”

Vedanta Resources, which is set to lose its blue-chip status in this month’s FTSE reshuffle, was off nearly 3 per cent or 23p to 821.5p. Fresnillo dropped 15p to 742p and Antofagasta dipped 7.5p to 761.5p.

There was an upswing for insurer Aviva, one of the top FTSE 100 climbers, after its turnaround prospects under chief executive Mark Wilson were backed by Bank of America Merrill Lynch.

The broker raised its target price to 550p from 475p and reiterated its buy rating on the blue-chip company, which climbed 9.5p to 428.9p.

British Airways and Iberia owner International Airlines Group was the biggest riser in the top flight, up 8.5p or 2 per cent to 366.1p.

 

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