Miners prove a drag as FTSE stutters

Mining stocks dragged the FTSE 100 index lower today as traders fretted ahead of next week’s United States Federal Reserve meeting.

American policymakers will meet next week to decide when to start tapering their support for the world’s largest economy, which will have knock-on effect for miners’ raw materials throughout the world.

Brenda Kelly, senior market strategist at IG, said: “Thirty-five per cent of economists polled expect a change in monetary policy this month and, given how wrong the market got it in September, there is a distinct reticence to jump on any singular band wagon at this juncture.”

The FTSE 100 index closed down 36.17 points at 6,523.31 but the FTSE 250 index – which is seen as a better reflection of the UK economy – rose by 19 points to 15,410.79.

Among the mining stocks, BHP Billiton fell 36.5p to 1,807.5p, while Vedanta Resources dipped 17.5p to 804p.

Royal Mail dipped 0.5p to 596.5p as the newly-listed company prepares for life in the FTSE 100 index. The latest reshuffle of the blue-chip index is based on tonight’s closing prices, prior to being implemented on 20 December.

The privatised firm’s promotion to the top-flight following a share price rise of around 80 per cent is likely to add fuel to accusations that Business Secretary Vince Cable sold the group off on the cheap.

This quarter’s FTSE reshuffle is set to be dominated by recent flotations, with Alton Towers and Madame Tussauds owner Merlin Entertainments and estate agency Foxtons also on course to join the FTSE 250.

Chemicals firm Croda International and mining company Vedanta are set to be relegated from the FTSE 100.