THURSDAY MARKET CLOSE: FTSE drops 1% as economies struggle

The pound was slightly down against a resurgent US dollar at 1.63. Picture: Getty
The pound was slightly down against a resurgent US dollar at 1.63. Picture: Getty
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Mining stocks were back in the red due to falling raw material prices amid further soft economic data from around the world.

Chris Beauchamp, market analyst with IG, said: “The sector has taken the brunt of the selling as raw materials’ prices dive once again, and spells out a very bleak outlook for the FTSE 100 versus other indices given its heavy mining contingent.”

The FTSE 100 Index was down 66.56 points at 6,639.71, as BHP Billiton slid 51.5p to 1,746p and Anglo American dropped 54p at 1,407p.

The pound was slightly down against a resurgent US dollar, at 1.63, after Bank of England governor Mark Carney said the case for raising interest rates had become more balanced. But sterling rose to a two-year high against the euro at €1.28 as Carney’s European counterpart kept up the dovish rethoric.

EasyJet was the biggest riser in the top flight after rival Ryanair upgraded its passenger traffic forecasts for the year. Alongside Ryanair’s better profits guidance, that boosted EasyJet ahead of its own trading update to the City next week. Shares were almost 3 per cent higher, up 35p to 1,350p.

Royal Mail was again under pressure after a profits warning from UK Mail just a day after a similar caution from TNT Express. Shares in Royal Mail were down 14.4p to 400p, while delivery service UK Mail plunged 13 per cent, or 75p to 490p, after it said parcels volumes were lighter than it had forecast.

In corporate news, Direct Line rose after the car insurer sold its international division. Shares lifted 1.4p to 298.5p as the company said it would return almost all of the proceeds to investors, although its early gains had been much greater.

After the market closed, Lloyds announced plans to sell 57.5 million shares in TSB, taking its stake in the newly spun-out lender to about 50 per cent.