FTSE close: China export woes; Lonmin falls

By This Is Money
Updated: 12:31 EDT, 10 June 2011

17.20 (close)

London's leading share index tumbled in the last hour as US shares slumped on a slowdown in Chinese exports and worries about inflation.

The FTSE 100 Index closed 90.5 points lower at 5765.8, as miners - vulnerable to a slowdown in demand from resource-hungry China and the US - weighed on the market.

China's General Administration of Customs reported export growth slowed sharply in May, raising concerns over global growth, which triggered a 1.1% fall on Wall Street's Dow Jones Industrial Average.

UK manufacturers, meanwhile, 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 these figures sent the pound down to 1.624 against the dollar, though sterling rose to 1.131 against the euro 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.

Telecoms giant BT got mixed reviews from two brokers with Evolution issuing a mild downgrade to add, from buy, and commenting that the firm's revenue story is still unconvincing.

Credit Suisse was more upbeat, commenting it is more optimistic on cost-cutting than other brokers given the benign environment in the UK. It has raised it price target from 197p to 200p, although this is below Evolution's 226p. Shares in BT were down 3.1p at 193.9p.

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. 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 English 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% increase in its sales rate in the 17 weeks to May 31 to 111 units per week as the average selling price increased 4% to £182,000.

The biggest FTSE 100 risers were Essar Energy up 6.8p to 432.8p, Associated British Foods ahead 15p at 1,061p, Johnson Matthey up 14p at 1,998p and Capita ahead 5p at 740p.

The biggest fallers were ENRC down 60p at 742p, Lonmin off 84p at 1,460p, GKN down 7.2p at 207.2p and Wolseley off 65p at 1,906p.

16.50: The Footsie has slipped 76.7 points to 5,779.7 following a poor Dow opening.

The Dow is currently down 141 to 11,983.

16.05:

The Footsie has plummeted after the Dow Jones racked up a three-digit loss that took it back below the key level of 12,000.

Growing concern that the global economic recovery is grinding to a halt sent the Dow 133.7 points lower to 11,990.7.

In London, the FTSE 100 is down 74.7 points at 5,781.6 as the week's trading draws to a close.

15.00:

The Dow Jones has opened in the red, down 87.8 at 12,036.6.

The FTSE 100 is 37.2 points lower at 5,819.1.

14.10:

We have more on today's trading update from Bellway, which has detected signs that the uncertainties affecting consumer confidence have diminished.

It hailed a 'healthy spring selling season' after achieving increased home sales and prices.

Bellway's stock is up 27.5p at 724.5p.

The FTSE is 13.8 points lower at 5,842.6.

13.00:

The FTSE 100 is under pressure as fears mount that UK economic growth could take another dip after figures showed industrial production slumping.

Manufacturing saw its biggest monthly drop for two and a half years, with official figures revealing a 1.5% fall between March and April.

The blue chip index is down 16.4 points at 5,840 as the news added to earlier worries about economic prospects prompted by a significant slowdown in Chinese export growth.

Kazakhstan miner Eurasian Natural Resources is down 28p at 774p as investors grapple with the ousting of its two most senior independent directors this week.

Silver and gold miner Fresnillo is another weak spot, shedding 22p to trade at 1395p.

Supermarket heavyweight Tesco is still higher on a broker upgrade and anticipation over a sales update due next week.

But rival Sainsbury's, which also updates the market next week, lost gains from earlier in the session and dropped 0.6p to 327p.

Telecoms giant BT got mixed reviews from two brokers with Evolution issuing a mild downgrade to 'add', from 'buy', and commenting that the firm's revenue story is still unconvincing.

Credit Suisse was more upbeat, saying it is more optimistic on cost-cutting than other brokers given the benign environment in the UK. It raised its price target from 197p to 200p, although this is below Evolution's 226p. Shares in BT were down 0.9p at 196.2p.

Outside the top flight, newspaper group Daily Mail and General Trust (owner of This Is Money) saw shares lift 4p to 440.6p after it said it was was reviewing options for its US retail trade show operation.

US stock futures point to a lower open on the back of the Chinese export figures and the ensuing falls on Asian and European markets. A profits warning from Toyota has dampened sentiment too.

11.30:

The FTSE 100 has taken back the ground lost earlier to trade flat - it's up 0.5 points at 5,856.8.

Yusuf Heusen, senior sales trrader at spreadbetter IG Index, commented: 'Again there seems to be a reluctance to push prices too much lower, at least for the time being.

'There may also be a degree of support creeping in for London equities in light of the weaker-than-expected PPI [Producer Price Index] data we've seen this morning – something that should help dampen inflation and allow the dovish stance over monetary policy to continue that bit longer.'

Meanwhile, the potential buyers circling Iceland are likely to become hungrier after the frozen food retailer announced record annual sales and profits.

Rivals said to be in the £1.5bn race after Landsbanki announced plans to sell its 67% stake include supermarket giants Morrisons, Sainsbury and Asda. We have more here.

In currency, the pound is at $1.6277 compared to $1.6381 at the previous close. Against the euro, the pound is at €1.1240 compared to €1.1271 at the previous close.

Brent crude is trading at around $118.50 a barrel today. Gold was fixed this morning at $1,541 an ounce compared with $1,537.75 at the previous close.

9.45:

The London market suffered a fresh setback as evidence emerged of a slowdown in Chinese export growth, knocking Lonmin and other commodity stocks.

The blue chip FTSE 100 index slid 14.9 points to 5,841.5.

China reported export growth of 19.4% in May, down from 29.9% in April, in a sign of weakening global demand.

The gloomy update stoked fears that the economic recovery is running out of steam.

It triggered declines on most Asian markets and overshadowed yesterday's strong performance on Wall Street, which was boosted by figures showing the US trade deficit unexpectedly narrowed in May.

Mining companies, which are particularly vulnerable to a slowdown in demand from resource-hungry China, weighed on trading in London today.

Platinum miner Lonmin topped the fallers board, edging down 29p at 1515p, followed by Eurasian Natural Resources, down 12.5p at 789.5p, and Xstrata, which shed 21p at 1344p.

Supermarket heavyweights Tesco and Sainsbury's provided some support to the market as investors looked ahead to their trading updates next week.

Tesco was up 2.6p at 412.2p after broker Jeffries upgraded the stock to buy from hold and forecast strong international growth for the firm. Sainsbury's was ahead 1p at 328.6p.

Outside the top flight, housebuilder Bellway was ahead 14.4p at 711.5p after it reported a healthy spring selling season as consumer confidence improved.

The UK's fourth biggest housebuilder posted a 9% increase in its sales rate in the 17 weeks to May 31 to 111 units per week as the average selling price increased 4% to £182,000.