Mining rout sends FTSE to its biggest fall since Brexit

FEARS that China is producing too much steel sent the UK’s miners into freefall, helping to push the FTSE 100 to its biggest drop since the Brexit vote.

According to Chinese media reports, its steel output for March hit a record 72m tons in anticipation of increasing demand later in the year.

The price of iron ore, a key ingredient of steel-making – which is already in global oversupply – was hit badly, dropping nearly 5pc to under $69 (per ton).

As a result, large miners dominated the list of the FTSE’s biggest fallers, led by BHP Billiton, which sank 5.6pc, or 71p, to 1198p, and Glencore, which fell 5.6pc, or 17.25p, to 291.8p. Anglo American also tanked, down 5.1pc, or 60p, to 1110p.

But the FTSE 250 held the mining sector’s biggest losses.

Iron ore pellet producer Ferrexpo fell 11.5pc, or 17.8p, to 137.2p, to become the index’s biggest loser. Meanwhile, metal producer Vedanta Resources was down 8pc, or 61p, to 699.5p, with losses compounded by broker Jefferies’ decision to cut its target price to 850p.

The FTSE 100 finished down 2.5pc, or 180.09, at 7147.5 – its biggest one-day fall since the immediate aftermath of last year’s EU referendum. Aside from the mining rout, the index was hit by Prime Minister Theresa May’s surprise decision to call a General Election on June 8. Glaxo Smith Kline slipped after launching a bid to introduce a shingles vaccination in Japan.

Shingles, a painful rash caused by the chickenpox virus, can cause scarring and lasting pain and becomes more frequent in old age. GSK said the vaccine, called Shingrix, reduced the symptoms and occurrence of shingles in a clinical trial of more than 37,000 patients across 18 countries.

The firm submitted a drug application through Japan Vaccine Company, its joint venture with Japanese firm Daiichi Sankyo. But the pharma giant, a favourite of fund manager Neil Woodford, slid 3.7pc, or 60.5p, to 1586.5p.

Circassia Pharmaceuticals also edged down after it pulled the plug on allergy funding.

The firm’s decision came after it revealed its treatment for dust mite allergies had failed in a clinical trial. It marked the second high-profile botch in the respiratory disease specialist’s allergy operation. Last June, it lost twothirds of its value after a treatment for cat allergies also misfired. Shares were down 1.7pc, or 1.75p, to 101.25p. Amid the gloom, betting group

Ladbrokes Coral emerged as one of the day’s favourites. The firm edged up 0.6pc, or 0.8p, to 129.3p after its odds improved on the back of a sunny outlook from stockbroker Davy. It raised the firm’s price target to 156p from 128p, and increased its rating to ‘outperform’ from ‘neutral’.

The broker said Ladbrokes looks strongly positioned as regulators continue to tighten their grip on the gaming sector.

Likewise, Bovis Homes inched up after being upgraded to ‘buy’ by analysts at Jefferies.

Earlier this month, the housebuilder’s shares soared when it rejected a £1.2bn takeover bid from rival Galliford Try.

Rather than be acquired by Galliford, Bovis appointed its rival’s former boss Greg Fitzgerald as chief executive and launched a turnaround bid. Shares yesterday rose 1.7pc, or 15p, to 926.5p. Security company Westminster

Group saw £1.8m wiped off its value after issuing 10m shares to raise £1m of capital. Half will be used to pay off the remainder of a loan made to the firm by Darwin Private Equity. The rest will be invested in business development. Shares fell 15.3pc, or 1.9p, to 10.4p.