Footsie declines as weaker mining stocks outweigh Next and M&S gains

FTSE:5,984.07 (–98.81) Mid-250:11,909.08 (–105.71) Small Cap:3,291.76 (–23.25)

UK STOCKS dropped yesterday, as energy and mining companies fell with commodity prices and ARM Holdings falling for a second day.

The FTSE 100 tumbled 98.81, or 1.6 per cent, to 5,984.07.

The Investors “had their fingers firmly on the selling button”, said Angus Campbell, head of sales at Capital Spreads in London.

“The commodity play was to blame again as miners and energy stocks were sold off,” he said.

Stocks extended losses yesterday after an April gauge of service industries in the US unexpectedly declined to the lowest level in eight months.

Earnings at western European companies that have reported results since April have expanded 17 per cent on average, according to Bloomberg. That compares to 21 per cent for companies in the US Standard and Poor’s 500 Index.

BG fell 3.1 per cent to 1,457p as crude oil declined for a third day in New York. Tullow Oil lost 3.7 per cent to 1,363p and Cairn Energy slid 3.2 per cent to 435.7p. Antofagasta slipped 4.1 per cent to 1,212p, even accounting for the loss of rights to the latest dividend payment, as copper fell to a seven-week low.

Xstrata lost 2.5 per cent to 1,448p and Kazakhmys slid 2 per cent to 1,305p. Fresnillo, the world’s largest primary silver producer, sank 5.2 per cent to 1,515p as silver headed for the biggest three-day fall since 2008.

ARM, a UK designer of chips that help power Apple’s iPhone, lost 7.3 per cent to 558p.

Next shares rose 4.4 per cent to £23.19, the biggest advance on the senior index by a clear margin. The company’s numbers were strong enough to bring its nearest rival, Marks and Spencer, into second place, up 3.8 per cent at 398.8. Tesco, which sells a significant amount of clothing alongside its core grocery range, was 0.6 per cent higher at 408.6p.

Imagination Technologies fell 5.8 per cent to 469p. Legal and General dropped 3.6 per cent to 119.4p after the UK’s fourth- biggest insurer by market value said first-quarter revenue missed analysts’ estimates.

Standard & Chartered slid 3.7 per cent to 1,604p after the UK bank that makes three-quarters of its profit in Asia cut jobs to control costs in the first quarter as competition raised pressure on profitability. – (Copyright The Financial Times Limited 2011/Bloomberg)