FTSE slides on China slowdown fears

MINERS dragged the Footsie lower yesterday after a slowdown in Chinese exports prompted fears of a drop in demand for raw materials, bringing an end to the index's worst week since Japan's earthquake in March.

China reported that export growth slowed sharply in May, triggering concerns over the strength of the global economic recovery and sending Wall Street's Dow Jones Industrial Average down 1.1 per cent in early trading.

New York's losses triggered a 1.6 per cent plunge in London's benchmark FTSE 100 index, which closed down 90.54 points at 5,765.80.

Jimmy Yates, head of equities at CMC Markets, said: "Confidence is fragile and the index closed below its 200-day moving average, around 5,821, that has left investors wondering how far this retreat might go."

Will Hedden, sales trader at IG Index, added: "If we put aside the week-long spike-down that the market took on the back of the Japanese earthquake, this is the weakest that the UK's leading index has looked in 2011."

UK manufacturers registered the biggest monthly drop in output for two-and-a-half years in April as the royal wedding bank holiday hit production. Disappointment with those figures sent the pound down to $1.62 against the dollar, though sterling rose to €1.13 on reports of disagreement within the European Union over how to provide more support for Greece.

Kazakhstan miner Eurasian Natural Resources topped the fallers, down 60p at 742p as investors grappled with the ousting of its two most senior independent directors this week. Anglo American was another weak spot and shed 97.5p at 2,891p, while Vedanta fell 67p to 1,977p.

A warning of lower sales by platinum miner Lonmin added to the sector's gloom and knocked the group's shares down 84p to 1,460p.

Outside the top flight, newspaper group Daily Mail and General Trust saw shares drop 2.2p to 434.4p after it said it was reviewing options for its US retail trade show operation.

And Adecco declined to comment on reports it may bid 160p-per-share for recruitment firm Hays, which rose 3.1p to 109.2p.

London Pride brewer Fuller, Smith & Turner has seen a surge in exports as beer fans in countries including the US and Canada develop a thirst for British ales, news that boosted its shares 14.5p to 650p.

Housebuilder Bellway was ahead 19p at 716p after it reported a healthy spring selling season as consumer confidence improved.The UK's fourth-biggest housebuilder posted a 9 per cent increase in its sales rate in the 17 weeks to 31 May to 111 units per week as the average selling price increased 4 per cent to 182,000.

Among the Scottish stocks, Cupid jumped 9.8 per cent or 19.54p to end the day at 218.04p after analysts at Peel Hunt listed the Edinburgh-based dating website operator as one of its "core buys".

Aberdeen-based transport giant FirstGroup fell 1.9 per cent or 6.2p to close at 329.3p despite RBS Equities reiterating its "buy" recommendation on the stock. RBS, which lowered its target price from 450p to 430p, said: "We view FirstGroup as unloved and cheap."