PLUNGING base metal prices saw mining companies tumble yesterday, dragging down the blue-chip index. Miners, the backbone of the FTSE 100 for most of the year, accounted for seven of the leading index's eight largest fallers as commodity prices fell.
Rio Tinto led the decline, plunging 5.5 per cent or 293p to 5,047p, while rival Xstrata dropped 200p to 3446p and Antofagasta lost 31p at 547.5p.
Despite the drop in the heavyweight mining sector, the Footsie treaded water for most of yesterday,
before dropping in late trade, driven down by poor economic news from the US.
Manufacturing and construction figures painted a gloomy picture of the world's largest economy and sent Wall Street to early losses.
Meanwhile, oil prices rose back above $126 a barrel after a spike in gas futures.
The Footsie index of Britain's 100 leading shares closed 57.2 points lower at 5,354.7, a fall of 1 per cent. Yesterday's largest faller was British Gas-owner Centrica, with the company hit after EDF pulled back for a bid for British Energy.
Centrica had hoped to take part in the deal to form a UK solution to any political sensitivity to the deal. The shares surrendered gains seen in the wake of yesterday's results to stand 17.75p lower at 297p, making it the top-flight's worst performer.
Kingfisher, meanwhile, was in demand yesterday. The owner of B&Q was the Footsie's standout performer, up 5 per cent, or 5.8p to 124.2p, after reducing its debt burden by announcing the 560m (£441.6m) sale of its Italian business Castorama.
The banking sector also enjoyed a rare positive session as investors added to holdings ahead of heavyweight results from Barclays, HSBC and Royal Bank of Scotland next week.
Half-year figures so far may not have done much to restore shattered confidence, but investors were comforted that Alliance & Leicester at least delivered a performance in line with expectations today.
The group, which has agreed a £1.26 billion sale to Spain's Santander, reported a 99 per cent plunge in first half profits to just £2 million, but shares held steady with a gain of 0.25p to 340.75p.
Edinburgh-based HBOS continued to rise after yesterday's sharp profits fall came in ahead of the City's worst expectations, forcing shares up another 4 per cent, or 11.75p, to 302.25p.
Meanwhile, Royal Bank of Scotland was up 3.5p at 215.25p and Barclays cheered 3.5p to 341.5p.
Lloyds TSB, which had suffered a backlash after its interim results disappointed on Wednesday, recovered from a weak opening to stand 4.75p higher at 300p.
British Airways reported a sharp fall in first quarter profits saying trading conditions were among the worst it had ever seen. Shares opened down 6 per cent but closed up 3.75p at 259p as investors decided recent falls were overdone.
The full article contains 495 words and appears in The Scotsman newspaper.
