London open: Mining stocks and Prudential drag markets lower

Equity markets declined on Tuesday morning on the back of mixed data from China, with mining stocks bearing the brunt of the selling pressure as metal prices weakened.

The FTSE 100, which set a three-week closing low of 6,876.47 on Monday, was down a further 0.22% at 6,861.50 early on with Prudential also providing a drag after announcing the exit of its chief executive officer (CEO).

Analysts at Accendo Markets said the benchmark was "making another test of March lows 6,860 as the index continues to weaken back from last week’s revisit of recent highs 6,970".

They said: "Mixed China inflation data overnight adds to woes about slowing growth in world’s #2 economy, but still likely boosts hopes of more stimulus, however, Eurozone/Greek progress remains pedestrian/tenuous at best."

Chinese consumer-price inflation rebounded from a five-year low but producer prices remained in deflation, raising the prospect of further stimulus measures by the country’s central bank.

The annual rate of consumer price index (CPI) inflation picked up to 1.4% in February from 0.8% in January, above forecasts for a 1% rise. The uptick came after the People's Bank of China introduced more stimulus measures and the Lunar New Year holiday pushed up food and transport costs.

At the same time, China’s producer price index dropped 4.8% from a year ago, worsening from January’s 4.3% drop and marking three full years of declines.

Analysts at Goldman Sachs said they expected the rise in CPI inflation to "alleviate the anxiety policy makers have about weak growth and risk of deflation". However, they added: "We still expect further loosening measures in the coming months as overall economic activity growth remains weak and CPI inflation is likely to ease again in March as the Chinese New Year distortion disappears".

Commodity stocks and Prudential fall

Mining stocks declined early on as metal prices weakened, with BHP Billiton, Antofagasta and Anglo American among the worst performers.

BHP Billiton fell despite saying it's on track to deliver 245m tonnes of iron ore for the year ending 30 June 2015 and that the company has delivered a "solid" performance amid "challenging market conditions".

Meanwhile, Antofagasta slipped on the court ruling that it must destroy at least part of its tailings dam at the Los Pelambres copper project in Chile as it is affecting the natural flow of a nearby river.

Oil producers such as Tullow, Shell and BG Group were also out of favour as crude prices declined. Brent futures were down 0.7% at $58.13 a barrel early on.

Insurer Prudential fell after confirming speculation that Credit Suisse has poached its boss Tidjane Thiam to replace its long-standing CEO Brady Dougan. Prudential, which also released final results showing operating profits growth slowed to 14% from 17% at the half-year stage, said it had identified a successor from within.

G4S was among the best performers after the security group reported a better-than-expected rise in full-year profits and raised its final dividend by 5%. The company did, however, raise provisions for underperforming UK government contracts by £45m.

Esure tumbled after saying that annual profits declined 12.8% on the back of challenging conditions in the insurance market and costs associated with the takeover of Gocompare.

Market Movers
techMARK 3,154.16 +0.15%
FTSE 100 6,861.50 -0.22%
FTSE 250 17,158.94 -0.05%

FTSE 100 - Risers
Morrison (Wm) Supermarkets (MRW) 214.00p +2.79%
G4S (GFS) 296.10p +1.75%
easyJet (EZJ) 1,730.00p +1.65%
Vodafone Group (VOD) 222.65p +1.62%
Schroders (SDR) 3,136.00p +1.49%
HSBC Holdings (HSBA) 573.00p +1.15%
Standard Life (SL.) 451.50p +1.07%
Shire Plc (SHP) 5,255.00p +0.86%
3i Group (III) 492.90p +0.86%
CRH (CRH) 1,740.00p +0.75%

FTSE 100 - Fallers
Tullow Oil (TLW) 332.50p -3.93%
Weir Group (WEIR) 1,837.00p -2.65%
Prudential (PRU) 1,623.00p -2.43%
Antofagasta (ANTO) 739.00p -1.79%
BHP Billiton (BLT) 1,516.00p -1.78%
Capita (CPI) 1,173.00p -1.59%
Royal Dutch Shell 'B' (RDSB) 2,109.00p -1.49%
BG Group (BG.) 906.80p -1.35%
Randgold Resources Ltd. (RRS) 4,503.00p -1.29%
Anglo American (AAL) 1,123.50p -1.27%

FTSE 250 - Risers
Allied Minds (ALM) 610.00p +7.96%
Inchcape (INCH) 794.00p +7.15%
Jimmy Choo (CHOO) 175.00p +2.10%
AO World (AO.) 197.10p +2.07%
Ocado Group (OCDO) 378.00p +2.02%
COLT Group SA (COLT) 150.60p +1.76%
Riverstone Energy Limited (RSE) 1,040.00p +1.66%
Beazley (BEZ) 285.30p +1.49%
Zoopla Property Group (WI) (ZPLA) 175.00p +1.45%
NMC Health (NMC) 639.00p +1.43%

FTSE 250 - Fallers
esure Group (ESUR) 207.10p -11.42%
Afren (AFR) 5.00p -8.61%
Ophir Energy (OPHR) 134.70p -3.85%
Lonmin (LMI) 121.50p -3.80%
Cairn Energy (CNE) 190.70p -3.74%
Elementis (ELM) 281.60p -3.23%
Acacia Mining (ACA) 244.80p -3.13%
Premier Oil (PMO) 150.90p -2.65%
RPS Group (RPS) 239.00p -2.65%
Petra Diamonds Ltd.(DI) (PDL) 181.00p -2.64%