London open: Stocks track declines in Asia as investors digest Yellen speech

London stocks fell on Thursday, tracking declines in Asian markets after US Federal Reserve Chair Janet Yellen highlighted her concerns about China’s wailing economy.

Yellen said in a prepared speech on Wednesday that financial conditions have become less supportive of economic growth, the slowdown in China could weigh further on the US and the outlook for inflation is falling.

The central bank chair is due to speak again at 1500 GMT, appearing before the Senate Banking Committee.

Meanwhile, oil prices took another turn for the worse with Brent crude down 0.78% to $30.60 per barrel and West Texas Intermediate down 2.3% to $26.83 per barrel at 0859 GMT.

The mining sector registered the biggest declines after Rio Tinto reported a 27% drop in full year revenue, hurt by falling commodities prices. Its EBITDA margin was 34%, compared with 39% in 2014. Underlying earnings totalled $4.5bn, down 52% ($4.8bn) on a year before.

“This, unsurprisingly, inspired the latest set of alarming losses in the UK mining stocks, Rio itself plunging over 8% (in a swift rebuttal to the rather overenthusiastic weak-dollar inspired gains seen this time last week),” said Connor Campbell, financial analyst at Spreadex.

Among other corporate stocks, Centrica’s shares slid after saying it will cut gas prices for customers by 5.1%.

Glencore was sitting lower after agreeing a $500m gold and silver streaming deal from its Antapaccay mine in Peru to help ease its balance sheet woes.

Tate & Lyle was in the red after reporting lower margins and continuing difficulties in the ethanol market in the third quarter.

In economic data, RICS house price balance held steady at +49% in January, slightly below expectations of +52%.

“The pronounced imbalance between housing demand and active supply continues to point to rapid gains in house prices,” said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.