Mining slump drags FTSE to new low

The FTSE 100 staged an impressive fall to close out the week, sinking to an eight-week low after an initially promising start to the day.

The leading index closed the day down 63.84 points, or 0.91%, at 6,963.64 – falling below the psychologically important 7,000 barrier.

It is the first time it has fallen below that since July.

Michael Hewson, chief market analyst at CMC Markets UK, explained a bond market sell-off may be to blame, with UK fiveyear gilt yields rising to their highest levels since March 2020, and 10-year yields to a fourmonth high.

Bond yields rise as the price of the bonds fall. He added: “It could be the recent headlines around new fiscal rules from the Chancellor is exerting upward pressure on short-term UK borrowing costs.

“While we’ve seen an afternoon sell-off, with basic resources and industrials getting hit the hardest, some sectors have managed to outperform with the travel and leisure sector leading the gainers.”

Airlines and hotel groups enjoyed strong growth on hopes the UK Government will simplify travel restriction classifications.

British Airways owner IAG led the charge with shares closing up nearly 5% or 7.04p at 149.5p and Intercontinental Hotels up 90p at 4,650p.

But the sell-off in mining stocks dragged the index down, with Anglo American shares dropping 227.5p at 2,591p and BHP down 94.4p to 1,873.8p.

European markets saw similar falls to the FTSE, with the German Dax down 1.03% and the French Cac down 0.79%. The pound was up 0.03% against the dollar at 1.375 and up 0.08% against the euro at 1.172.