MONDAY MARKET CLOSE: Chinese slowdown talk sinks miners

Concerns that China’s resource hungry factories are moving into reverse hit London’s big miners.

Tesco shares crashed to an 11-year low. Picture: PA
Tesco shares crashed to an 11-year low. Picture: PA

David Madden, market analyst at IG, said: “China delivered a thinly veiled growth warning which has sent the mining stocks into a tailspin, and traders are preparing themselves for terrible manufacturing figures from HSBC’s survey of Chinese manufacturing.”

With Tesco also weighing on the Footsie following its profit warning on a profit warning, the index was 64.29 points lower at 6,773.63.

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Tesco shares crashed to an 11-year low after the supermarket warned it may have overstated profits by £250 million. The revelation meant the group has now downgraded profit forecasts three times in as many months and wiped around £2 billion off its market value.

Shares were more than 11 per cent lower, off 26.6p at 203p. Other supermarkets were also impacted by the developments as Morrisons dropped 3p to 179p and Sainsbury’s declined 5.5p to 278.8p, with the latter receiving a target price downgrade from broker Exane BNP Paribas.

Among the mining stocks, Rio Tinto sank 120.5p to 3,058.5p and Anglo American fell 45.5p to 1,426.5p. Commodities giant Glencore was down 17.6p at 341.9p.

Meanwhile, some of the stocks on the front foot after the Scottish referendum result gave up the gains seen on Friday.

Standard Life was 1.3p lower at 420.3p while Lloyds Banking Group was off 0.6p to 76.3p on continued speculation that it will move operations south of the Border despite the No vote.

In a quiet session for corporate news, Moss Bros made headway after it reported like-for-like sales rose 6 per cent in the first seven weeks of its second half. Interim results were also marginally better than expected, helping shares rise by 4 per cent or 3.5p to 94.25p.