London midday: Miners fall as investors take profits after recent record

Hopes for further stimulus in China weren't enough to lift stocks in the mining sector on Monday, as risk appetite was scaled back in the aftermath of another record high for the Footsie.

With both UBS and Citigroup making downwards revisions to their iron ore forecasts, mining stocks were sold off across the board.

Meanwhile, with just four weeks to go before polling day, political uncertainty in the UK was also prompting investors to take profits.

The FTSE 100 was down 0.46% at 7,057.33 by midday after settling at a new all-time closing high of 7,089.77 on Friday. The intraday record high of 7,095.36 was also reached on that day.

Investors were also treading carefully ahead of a busy week on the market worldwide with UK inflation, US retail sales and a policy meeting at the European Central Bank likely steal the spotlight over the coming days.

Wednesday's gross domestic product figures from China will also be in focus after figures overnight revealed that Chinese exports dropped at an annual rate of 15% in March, a significant miss on the 10% increase expected by analysts. Exports also sank 12.7%, compared with the estimated 10% decline.

The weak figures received a warm welcome from markets in Asia on Monday on increased speculation about further stimulus from Beijing, with stocks in Hong Kong and mainland China surging 2-3%.

The election campaign in Britain has stepped up a gear with various parties continuing to come out with promises in a bid to secure votes. However, there has been little shift in the polls since the leaders of the major parties held a televised debate last month.

"Another hung parliament looks likely. Based on current polling at least three parties would be required to form a government," said economic George Buckley from Deutsche Bank.

Mining stocks drop

Citigroup downgraded its stance on the mining sector on Monday to 'neutral' from 'bullish', saying that upside is "now capped" by weaker iron ore prices. Citi now expects iron ore price to $45 per tonne in 2015 and $40 per tonne in 2016. The bank lowered Rio Tinto, Glencore, BHP Billiton and Lonmin to 'neutral' and cut Vedanta Resources and Anglo American to 'sell'.

UBS also lowered its iron ore forecast for 2015-2019 by 20-30% to $48-55 a tonne.

Precious metal peers Randgold, Centamin and Fresnillo, however, were bucking the trend as shares edged higher.

BP was feeling the effects of a broker downgrade, as Bank of America Merrill Lynch cut its recommendation to 'neutral', while Pearson was lowered to 'underperform' by Jefferies.

In contrast, HSBC was boosted after Morgan Stanley lifted its rating on the stock to 'equal weight' following a 17% underperformance against the Stoxx 600 banks index so far this year.

Aviva was also heading higher after Barclays, JP Morgan and Morgan Stanley analysts all reportedly weighed in with positive recommendations.

Market Movers
techMARK 3,258.16 -0.48%
FTSE 100 7,057.33 -0.46%
FTSE 250 17,820.35 -0.31%

FTSE 100 - Risers
Aviva (AV.) 564.50p +1.71%
HSBC Holdings (HSBA) 618.60p +1.06%
Fresnillo (FRES) 709.50p +0.85%
Barclays (BARC) 258.40p +0.53%
Royal Dutch Shell 'B' (RDSB) 2,056.50p +0.41%
RSA Insurance Group (RSA) 437.30p +0.39%
Royal Dutch Shell 'A' (RDSA) 2,034.50p +0.39%
Intertek Group (ITRK) 2,625.00p +0.38%
Ashtead Group (AHT) 1,080.00p +0.37%
Royal Bank of Scotland Group (RBS) 350.10p +0.34%

FTSE 100 - Fallers
BHP Billiton (BLT) 1,422.00p -2.84%
Antofagasta (ANTO) 720.50p -2.70%
Anglo American (AAL) 996.30p -2.51%
Barratt Developments (BDEV) 544.50p -2.42%
Tesco (TSCO) 244.95p -2.41%
Burberry Group (BRBY) 1,769.00p -2.05%
Taylor Wimpey (TW.) 163.10p -1.81%
Pearson (PSON) 1,445.00p -1.77%
Rio Tinto (RIO) 2,791.50p -1.60%
Aggreko (AGK) 1,547.00p -1.53%

FTSE 250 - Risers
Centamin (DI) (CEY) 60.85p +3.49%
Home Retail Group (HOME) 169.60p +2.73%
Rank Group (RNK) 194.70p +2.58%
FirstGroup (FGP) 103.80p +2.47%
Cranswick (CWK) 1,453.00p +2.32%
Tullow Oil (TLW) 338.40p +2.20%
Micro Focus International (MCRO) 1,236.00p +1.98%
Just Eat (JE.) 446.90p +1.82%
Aveva Group (AVV) 1,573.00p +1.68%
Kier Group (KIE) 1,651.00p +1.66%

FTSE 250 - Fallers
Millennium & Copthorne Hotels (MLC) 571.00p -3.14%
Kaz Minerals (KAZ) 213.80p -2.82%
Law Debenture Corp. (LWDB) 518.00p -2.81%
BlackRock World Mining Trust (BRWM) 292.00p -2.31%
Ashmore Group (ASHM) 307.50p -2.23%
Lonmin (LMI) 127.10p -2.23%
Dechra Pharmaceuticals (DPH) 1,016.00p -2.12%
Diploma (DPLM) 815.00p -2.10%
Saga (SAGA) 184.00p -2.02%
Fisher (James) & Sons (FSJ) 1,301.00p -1.96%