Min­ers spooked by China slow­down

The Daily Telegraph - Business - - Business - TOM REES MAR­KET RE­PORT

MIN­ING stocks tum­bled on the FTSE 100 yes­ter­day as con­cerns of an eco­nomic slow­down in China were re-ig­nited by stut­ter­ing in­dus­trial pro­duc­tion in the Asian pow­er­house.

In­dus­trial out­put growth, which un­der­pins de­mand for base metal and their prices, slowed in Au­gust to 6pc.

Lon­don’s min­ers re­liant on a strong Chi­nese econ­omy slumped along­side metal prices, as the joint-worst in­dus­trial out­put fig­ure in 20 months played into fears that eco­nomic ac­tiv­ity in the world’s sec­ond largest econ­omy is de­cel­er­at­ing.

A marked eas­ing in in­fra­struc­ture in­vest­ment was the main cul­prit for the slow­down, ac­cord­ing to Cap­i­tal Eco­nomics’ China econ­o­mist, Ju­lian Evans-Pritchard. “The de­cline was driven by pri­vate firms, who ap­pear to have been hard­est hit by the gov­ern­ment’s ef­forts to cut in­dus­trial ca­pac­ity,” he ex­plained, adding that China’s econ­omy will suf­fer in com­ing quar­ters from the gov­ern­ment front-load­ing fis­cal spend­ing this year and tighter mon­e­tary con­di­tions.

Af­ter ral­ly­ing dur­ing the sum­mer, cop­per prices suf­fered a third day of de­cline, slip­ping 1.3pc to $6,457 per ton, a four-week low. Jit­tery in­vestors pulled out of huge min­ers ex­posed to the Chi­nese econ­omy with Rio Tinto weigh­ing heav­i­est on the FTSE 100, slip­ping 124.5p to £35. Ri­vals Glen­core and BHP Bil­li­ton weak­ened 12p to 351.6p and 47p to £13.62, re­spec­tively, while An­glo Amer­i­can out­per­formed its peers, dip­ping just 32.5p to £13.17.

The pound’s surge af­ter the Bank of Eng­land sur­prised mar­kets by giv­ing its strong­est hint yet that it will hike in­ter­est rates punc­tured the blue-chip in­dex al­ready tread­ing wa­ter. Also weak­ened by a spate of in­di­vid­ual fall­ers, the FTSE 100 re­treated 84.31 points to 7,295.39. Ex­pe­rian dived 74p to £14.59 on a read-across from trou­bled US ri­val Equifax as Demo­cratic se­na­tor Mark Warner asked the Fed­eral Trade Com­mis­sion to in­ves­ti­gate the credit-re­port­ing agen­cies’ cy­ber se­cu­rity de­fences. The probe into the huge data leak at Equifax, which in­cluded de­tails on 143m Amer­i­cans, was widened to in­clude Ex­pe­rian yes­ter­day af­ter­noon with Repub­li­can Carolyn Maloney send­ing a let­ter to the com­pany ask­ing what steps it had taken to pro­tect con­sumers’ data.

Re­tailer Next, a rare bright spot in Lon­don, sky­rock­eted 577p to £49.94 on a brighter out­look fol­low­ing a chal­leng­ing first half of 2017, pulling up peers Marks & Spencer and Deben­hams 9.1p to 333.6p and 0.5p to 42p, re­spec­tively. On the FTSE 250, Spire Health­care crashed 57.7p to 252.2p, a 19pc plum­met, af­ter cut­ting its guid­ance on softer NHS re­fer­ral fig­ures, with blue-chip peer Medi­clinic In­ter­na­tional, which has a 30pc stake in Spire and is per­sis­tently linked with a full takeover of the com­pany, drop­ping 23.5p to 711p.

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