FTSE 100 Friday close: Miners hit as China’s flagging growth rate worries market

30th May 2014

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Mining stocks fell firmly out of favour this week as concerns over China’s economic growth rate escalated.

The Chinese government reportedly urged local authorities to speed up on their building and construction spend in a bid to boost to nation’s slowing economy.

As the world’s largest consumer of metals and raw materials, the move spooked markets. But FTSE 250 constituent Fenner, also helped to dampen the mood across the sector as the engineering group, a major supplier of the commodities industry issued a profit warning.

The FTSE 100 closed on Friday at 6,844.51, 27.78 points off on the day and flat over the week.

Anglo American’s stock collapsed 7% – the week’s steepest fall – to finish on Friday at 1,457.5p. Rio Tinto also dropped sharply, shedding 6% to 3,057p while Fresnillo lost 5% to 806p. Randgold Resources wasn’t immune to the bearish sentiment, closing 3% lower at 4,357p and BHP Billion fell 4% to 1,868p.

Medical devices and knee joint manufacturer Smith & Nephew was the leader-board’s top riser, jumping 10% to 1,046p, as US competitor Stryker showed a bid interest while analysts at both UBS and Deutsche reiterated their respective ‘buy’ recommendations on the firm’s shares.

With the World Cup just around the corner, this week saw broker Nomura reaffirm its ‘buy’ rating on bookmaker William Hill, sending its shares 6% higher over to week to 355.6p.

London Stock Exchange Group also witnessed a 6% weekly rise to finish at 1,958p, as Credit Suisse issued an upbeat note on the firm, repeating its  ‘outperform’ rating while Holiday Inn owner Intercontinental Hotels Group also increased 6% to 2,355p.

Shares in Severn Trent firmed 2% to 1,968p as the utility group reported better than expected numbers for the past year, where in its annual results, the water and sewerage firm announced that its pre-tax profits were up 7% year-on-year to £269.1m.

Within the banking sector, Lloyds up 3% at 77.86p, confirmed its decision to sell 25% of retail lender TSB as part of its European Commission requirements, with the remainder to be offloaded by the end of next year. Elsewhere Royal Bank of Scotland, which confirmed further branch closures rose 4% to 346.6p, while HSBC put on 2% to 629.2p. Standard Chartered and Barclays both finished the week flat at 1,342.5p and 247p respectively.

Next week sees updates and results arrive from Tesco, platinum giant Johnson Matthey and plumbing group Wolseley.

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