TUESDAY MARKET CLOSE: Miners drag FTSE back on China talk

The FTSE 100 pulled back after rallying within touching distance of its all-time closing high, as concerns over China prompted a bout of profit taking.

With fears being expressed about Chinese bank lending and possible future steps that Chinese authorities might take in seeking to take some of the heat out of the property market, the Footsie dropped 35.36 points to close at 6,830.5.

Michael Hewson, chief market analyst at CMC Markets, said: “The catalyst on this occasion appears to have been further sharp falls in the Chinese currency while Chinese stock markets dropped back near to multi- month lows.”

London’s listed miners were the main casualties because of their exposure to Chinese construction. The fallers’ board was led by silver miner Fresnillo, which fell 3 per cent or 30p to 967.5p, followed by Rio Tinto, off 97.5p to 3,439p and Anglo American down 33p at 1,500.5p.

Engineering group GKN was another big faller in the top flight, even though it reported a 17 per cent rise in underlying profits for last year.

The car parts specialist expects further progress this year, but warned that currency translation headwinds may also have an impact.

Shares were off 4.2p at 410.7p, although much of the decline was due to profit-taking after a strong run for the stock as vehicle production improves.

Housebuilder Persimmon, which has been one of the market’s best performers in recent months, fell back after reporting a 49 per cent rise in profits. It aims to speed up payments under a planned £1.9 billion programme to return cash to investors, but this was not enough to prevent the stock slipping 8p to 1,463p.