LONDON (ShareCast) - Sharp falls across the mining sector pushed the FTSE 100 into negative territory on Monday morning as economic figures from China disappointed, though markets rebounded slightly as growth in Japan was revised higher.

A slowdown in Chinese inflation, bank lending, money supply growth and industrial production in May weighed heavily on markets early on, with miners hit hard on concerns over the outlook for demand.

"Cleary such figures are a sharp reminder that China is still struggling to recover with the global economic downturn and there is still a way to go before investors’ confidence in the economic giant returns," said Financial Trader Shavaz Dhalla from Spreadex this morning.

However, losses in London were trimmed by midday after stocks rallied in Asia with Tokyo's Nikkei 225 index up nearly 5.0% following an upwards revision to economic growth figures in Japan in the first quarter. The Japanese economy expanded at an annual rate of 4.1% in the first three months of 2013, ahead of the initial 3.5% estimate.

"The Nikkei 225 has been seen to act as a new found influence upon trading within the European markets in recent times owing to its new found importance in the global growth story," said Research Analyst Joshua Mahony from Alpari.

"A typically US-centric marketplace has now been gazumped by ongoing affairs in the Japanese economy where European and American investors have developed increasingly Asian focused portfolios owing to the opportunity for significant market gains."

FTSE 100: Severn Trent sinks after latest bid rejection

Water group Severn Trent dropped this morning after rejecting the latest takeover proposal from international consortium LongRiver Partners at 2,200p per share. A spokesman for the consortium responded by saying that it would not make a further proposal for Severn Trent if the board does not engage in talks.

Mining stocks were also sharply lower as the economic data from China weighed on the outlook for demand. Anglo American, Vedanta Resources and Rio Tinto were among the worst performers.

Even precious metals producer Polymetal was lower despite signing two export sales contracts with Chinese off-takers for a volume of up to 50,000 tonnes of refractory gold concentrate produced at the Mayskoye gold project. The move will allow it to start generating free cash flows at its newest mine by the third quarter, the company said.

Terrestrial broadcaster ITV was a high riser after Liberum Capital hiked its target price for the stock by a third and kept its 'buy' rating, saying that the company could return up to £1.3bn to shareholders over the next three years. "ITV's structural position is better than consensus thinks," said analyst Ian Whittaker.

FTSE 250: Balfour Beatty and Betfair make gains

Infrastructure group Balfour Beatty rose after proposing to close a number of regional offices as part of an internal review of its UK construction business. The company also announced that it had been awarded a contract in excess of £110m to construct the 43-storey Providence Tower residential scheme for Landor, a wholly-owned subsidiary of The Ballymore Group.

Betfair was also higher after Citigroup upgraded the stock from 'neutral' to 'buy', with the broker saying that the online gaming group's valuation looks attractive compared with the wider sector.


FTSE 100 - Risers
ITV (ITV) 135.30p +4.56%
Hargreaves Lansdown (HL.) 928.50p +2.15%
easyJet (EZJ) 1,219.00p +2.09%
Kingfisher (KGF) 353.40p +1.93%
Royal Bank of Scotland Group (RBS) 333.40p +1.83%
Weir Group (WEIR) 2,271.00p +1.61%
Whitbread (WTB) 2,911.00p +1.53%
Schroders (SDR) 2,259.00p +1.48%
Wolseley (WOS) 3,138.00p +1.45%
London Stock Exchange Group (LSE) 1,402.00p +1.45%

FTSE 100 - Fallers
Polymetal International (POLY) 635.50p -5.92%
Severn Trent (SVT) 1,969.00p -4.88%
Anglo American (AAL) 1,402.50p -4.14%
Evraz (EVR) 123.70p -2.98%
Vedanta Resources (VED) 1,207.00p -2.74%
Smith & Nephew (SN.) 738.50p -2.64%
Rio Tinto (RIO) 2,736.50p -2.55%
Fresnillo (FRES) 1,120.00p -2.10%
Antofagasta (ANTO) 905.00p -1.84%
BHP Billiton (BLT) 1,799.50p -1.80%

FTSE 250 - Risers
Ocado Group (OCDO) 296.80p +7.61%
Balfour Beatty (BBY) 225.50p +4.40%
BBA Aviation (BBA) 281.80p +3.64%
Intermediate Capital Group (ICP) 452.30p +3.52%
Betfair Group (BET) 840.00p +3.45%
Close Brothers Group (CBG) 966.50p +3.15%
Sports Direct International (SPD) 530.50p +2.71%
888 Holdings (888) 155.40p +2.57%
Taylor Wimpey (TW.) 97.55p +2.09%
3i Group (III) 344.20p +1.96%

FTSE 250 - Fallers
African Barrick Gold (ABG) 133.00p -4.86%
Premier Farnell (PFL) 201.00p -4.06%
Lonmin (LMI) 286.40p -3.60%
TalkTalk Telecom Group (TALK) 220.00p -3.38%
Daejan Holdings (DJAN) 3,800.00p -3.23%
Ferrexpo (FXPO) 155.10p -3.00%
Electrocomponents (ECM) 256.20p -2.51%
Amlin (AML) 390.50p -2.47%
Domino Printing Sciences (DNO) 636.00p -2.15%
Hochschild Mining (HOC) 227.70p -1.56%

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