Sector movers: Supermarkets, miners drag London market down

The FTSE 100 closed 0.46% or 29.14 points lower at 6,305.49, while the FTSE 250 was down 0.48% or 82.20 points at 17,106.91, with Tesco (down 3.70%) leading the blue chip fallers.

The supermarket leader suffered the heaviest falls after it emerged that losses at Harris & Hoole – the coffee chain part-owned by it – doubled last year following a rapid expansion. Pre-tax losses at the coffee chain widened to £25.6m in the year ending 1 March 2015 from £12.8m the previous year. Rival Morrisons (down 2.62%) also traded lower.

Meanwhile, base metals were hammered on the London Metal Exchange sending mining stocks lower. The three-month copper delivery futures contract registered a massive 2.9% slump to $4,478.00 per metric tonne, extending a succession of losses beyond six-year lows, as Chile, the world’s largest producer of copper announced its intention to focus on "cost cuts" rather than production cuts.

Kevin Norrish, commodities analyst at Barclays, said, “With large copper surpluses looming prices may need to continue falling to encourage the supply cuts the market needs in order to rebalance over the medium term.”

Invariably, Antofagasta (down 2.32%) was among the biggest FTSE 100 fallers. Midcap resource stocks Nostrum Oil & Gas (down 8.98%), Kaz Minerals (down 3.73%) and oilfield services company Amec Foster Wheeler (down 3.88%) also registered losses.

On the positive side, aerospace and defence stocks were the standout gainers, as Prime Minister David Cameron announced a £12bn increase to the UK defence budget. Both Rolls-Royce (up 3.08%) and BAE Systems (up 1.02%) stacked up decent gains.

“The Prime Minister’s defence review has been somewhat upset by recent events, but this has proven to be good news for BAE and Rolls-Royce, which have risen today on expectations that the UK will boost its armed forces to help cover the twin problems of a resurgent Russia and fresh terror threats,” said Chris Beauchamp, senior market analyst at IG.