London midday: Mining stocks, China data drag FTSE lower

UK stocks were in the red on Monday, led by Glencore after a broker warned the mining company holds little value for shareholders.

Glencore’s shares plunged 24.67% at 11:25 BST as Investec said the challenging environment for mining companies “leads us to the question of how much value will be left for equity holders if commodity prices do not improve”. The note from the brokerage came as Glencore agreed to sell its Araguaia nickel project to Horizonte Minerals for a discount price of $8m.

Investec also mentioned the equity value of Anglo American could evaporate on weak commodities, sending the stock down 7.94% at 11:39 BST. Miners BHP Billiton, Rio Tinto and Antofasgasta were also among the biggest fallers on the FTSE 100.

Earlier this month, the Reserve Bank of Australia highlighted the weakness in commodities in its decision to keep interest rates unchanged at 2%, being one of the first central banks to directly address the issue.

In another hit to commodity producers, China’s industrial profits fell 8.8% in August compared to a year ago, following a 2.9% drop in July, according to the National Bureau of Statistics. The bureau said exports suffered exchange losses on the yuan’s depreciation in August.

“This adds to questioning over the health of the slowing nation and how the transition to consumption led growth from infrastructure-led is beginning to bite as well as how it may affect US rate-rise timing,” said Michael van Dulken, head of research at Accendo Markets.

Elsewhere in Asia, Bank of Japan governor Haruhiko Kuroda said inflation would not reach 2% without further improvement in wages, employment and prices. "The positive feedback loop between the increases in employment and wages and the rise in inflation needs to gain further momentum in order to achieve the price stability target of 2%," Kuroda said in a speech to business executives in the western city of Osaka.

In European news, pro-independence parties in Spain's Catalonia region won an absolute majority in regional elections but they fell just short of getting 50% of the vote, winning 1.9m out of 4m ballots cast. Spain’s central government in Madrid said it would challenge the move towards independence but the pro-independence parties are expected to form a coalition.

Across the Pond, a report on personal consumption expenditure will be released at 1330 BST and pending home sales figures will be published at 1500 BST. Federal Reserve officials Charles Evans and John Williams will speak at separate events after the close of markets, potentially offering further hints on the timing of an interest rate hike. Fed Chair Janet Yellen last week said she expected a rate increase later this year but left the door open on maintaining policy if the global economic outlook worsened.

On the corporate front, SABMiller jumped following a Sunday Times report that Anheuser-Busch InBev SA could bid about $106m for the company as early as Monday.

Vodafone dropped after ending talks with Liberty Global about a merger of the European businesses.

Market Movers

techMARK 3,031.21 -0.96%

FTSE 100 6,022.94 -1.41%

FTSE 250 16,713.14 -0.52%

FTSE 100 - Risers

SABMiller (SAB) 3,693.00p +2.93%

Sky (SKY) 1,050.00p +1.55%

ITV (ITV) 250.80p +1.05%

Morrison (Wm) Supermarkets (MRW) 155.60p +0.84%

Barratt Developments (BDEV) 668.00p +0.83%

BAE Systems (BA.) 442.60p +0.59%

Berkeley Group Holdings (The) (BKG) 3,479.00p +0.55%

Hikma Pharmaceuticals (HIK) 2,473.00p +0.32%

Associated British Foods (ABF) 3,250.00p +0.28%

Capita (CPI) 1,215.00p +0.25%

FTSE 100 - Fallers

Glencore (GLEN) 73.91p -23.98%

Anglo American (AAL) 567.50p -7.68%

BHP Billiton (BLT) 976.90p -4.79%

Rio Tinto (RIO) 2,119.50p -4.40%

Antofagasta (ANTO) 484.20p -4.31%

Standard Chartered (STAN) 632.80p -4.15%

Vodafone Group (VOD) 208.95p -4.00%

Fresnillo (FRES) 598.50p -3.23%

Aberdeen Asset Management (ADN) 297.80p -2.78%

GKN (GKN) 256.30p -2.62%

FTSE 250 - Risers

Ultra Electronics Holdings (ULE) 1,695.00p +2.17%

Saga (SAGA) 205.00p +1.84%

Indivior (INDV) 234.60p +1.69%

Ophir Energy (OPHR) 82.55p +1.60%

Home Retail Group (HOME) 135.50p +1.50%

Renishaw (RSW) 2,001.00p +1.47%

Poundland Group (PLND) 279.30p +1.45%

Caledonia Investments (CLDN) 2,180.00p +1.44%

Workspace Group (WKP) 950.00p +1.39%

Vesuvius (VSVS) 356.10p +1.31%

FTSE 250 - Fallers

Kaz Minerals (KAZ) 81.65p -19.56%

Just Retirement Group (JRG) 160.00p -8.04%

Allied Minds (ALM) 355.80p -6.37%

Premier Oil (PMO) 63.05p -6.11%

Vedanta Resources (VED) 431.10p -5.34%

Tullow Oil (TLW) 161.50p -4.72%

Worldwide Healthcare Trust (WWH) 1,740.00p -4.71%

Weir Group (WEIR) 1,121.00p -3.86%

Hunting (HTG) 388.10p -3.36%

IMI (IMI) 932.00p -2.87%

FTSE TechMARK - Risers

Filtronic (FTC) 6.75p +3.85%

SDL (SDL) 333.75p +3.33%

XP Power Ltd. (DI) (XPP) 1,625.00p +1.69%

NCC Group (NCC) 272.00p +1.49%

Spirent Communications (SPT) 75.00p +0.67%

Oxford Instruments (OXIG) 579.00p +0.61%

IShares Euro Gov Bond 7-10YR UCITS ETF (IEGM) € 202.18 +0.32%

Dialight (DIA) 629.00p +0.16%

Skyepharma (SKP) 363.50p +0.14%

FTSE TechMARK - Fallers

Oxford Biomedica (OXB) 8.35p -2.34%

RM (RM.) 162.00p -1.82%

Sepura (SEPU) 172.00p -1.01%

Innovation Group (TIG) 39.00p -0.64%

Consort Medical (CSRT) 919.50p -0.59%

KCOM Group (KCOM) 89.75p -0.28%

E2V Technologies (E2V) 228.50p -0.22%

Ricardo (RCDO) 894.00p -0.06%