Mining stocks weigh down weakened FTSE ahead of new US data

The FTSE100 share index is down by over 25 points at 10:30BST with miners being the main blue-chip anchors in morning trading. The weakened index echoes the overnight losses on Wall Street and Asia as global markets cringe in preparation for US GDP figures that are due out at 12:30GMT.

Kate Neilson
shareprices.com - Friday, July 30, 2010

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The mining sector is dragging the FTSE down

The broad sell-off has seen the UK’s top index lose much of the gains produced this week and dropped it below the 5,300 marker. July has been a strong rallying month for the FTSE with the market closing yesterday with the FTSE100 8.1 per cent up for the month.

But with investors anxiously awaiting the US GDP data release later today, the index has slipped back again with global economic recovery fears returning amidst rumours the data release will show a slide in growth. The GDP figures for the US are a strong indicator of the state of the economic recovery in the US, which ultimately affects global markets and not just Wall Street. It’s widely expected that US economic growth faded in the second quarter of the year, increasing talk about a double-dip recession.

The biggest faders in the early hours of trading have been miners with many investors retreating from resources stock.

Big players in the sector, Rio Tinto (LON:RIO), BHP Bilton (LON:BLT) and Xstrata (LON:XTA), head the retreat with all of them declining in the region of 1.8 per cent.

Energy shares joined the mining demise with Essar Energy (LON:ESSR) and Tullow Oil (LON:TLW) 1.5 per cent and 1.2 per cent down respectively. And oil giants BP (LON:BP) also posted losses exceeding one per cent after a panel of US judges heard arguments from lawyers on Thursday that all oil-spill related lawsuits against the firm should be merged.

The banking sector is also widely down with the exception of Lloyds Banking Group (LON:LLOY) which has generally gone against other banking stocks in trading this week. The part-nationalised bank is one per cent up today. Earlier in the week, Lloyds was the first bank to announce it was going to stop selling Payment Protection Insurance (PPI).

Also making positive gains on the index is British Airways (LON:BAY) which said it expects to break even at the end of the financial year, despite the Icelandic ash cloud fiasco and ongoing industrial dispute with unions representing the airline’s cabin crew. The shares are up 2.3 per cent, gaining 5p to 221p.

The FTSE 100 is 0.5 per cent down at 5,287.87 at 10:30BST.

 

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