Mining stocks lead downward spiral as metal prices plummet in London

FTSE: 5,395.70(–3.30) Mid-250:10,155.08 (+14.32) Small Cap:2,801.03 (+6.41)

MOST UK stocks fell yesterday, amid uncertainty that Slovakia will ratify the expansion of the euro area’s bailout fund.

Mining companies led the drop as base metal prices tumbled in London.

BG retreated as China extended a value-based tax on sales of oil and natural gas and crude oil fell.

The benchmark FTSE 100 slid 3.3, or 0.1 per cent in London as three stocks fell for every two that rose.

The rally “has stalled after some hesitation on Slovakia’s part about approving an extension” of the bailout fund, said Christopher Purdy, trader at Spreadex in St Alban’s, England.

“This hesitation casts further doubt over how long a set of states with vastly differing opinions can operate in concert,” he said.

The FTSE 100 had surged 9.2 per cent over the previous four days as German and French leaders pledged to create a plan in three weeks to recapitalise banks in Europe. A planned reinforcement of the European Financial Stability Facility, the bailout fund known as the EFSF, faced a vote in Slovakia’s parliament. Slovakia is the only country that has not ratified the fund.

Antofagasta slid 1.6 per cent to 1,077p, falling for the first time in five days. ENRC lost 2.3 per cent to 625p and Anglo American slid 1.1 per cent to 2,391p.

Copper led base metals lower as Chinese export growth waned in September. Copper for delivery in three months fell as much as 4.5 per cent to $7,159.75 a metric ton. Aluminium, zinc, tin, nickel and lead also declined.

Cairn Energy slid 1.4 per cent to 293.7p as crude oil fell from its highest level in more than two weeks in New York.

Tullow Oil slid 0.8 per cent to 1,397p.

BG fell 0.6 per cent to 1,307.5p.

China said it will extend a value- based tax on sales of oil and natural gas starting next month to help save energy in the world’s fastest-growing major economy.

Banks limited losses on the FTSE 100 yesterday, led by Royal Bank of Scotland which gained 2.8 per cent to 25.30p. Barclays rose 2.1 per cent to 175.7p and Lloyds Banking increased 1.6 per cent to 36.28p.

Rockhopper Exploration rose 13 per cent to 191.25p.

Mothercare surged 9.2 per cent to 210.2p after the children’s clothing retailer said chief executive Ben Gordon will step down. – (Bloomberg)