Mining stocks lead the way down as Vedanta Resources slumps by 4.5%

FTSE: 5,881.37 (-83.71) Mid 250: 11,546.02 (-71.41) Small Cap: 3,268.63 (-12.45):BRITAIN'S LEADING share index fell yesterday, weighed down by heavyweight miners as a recent rally by the sector went into reverse, and investors worried by dramatic political protests in Egypt decided to close positions.

At the close, the FTSE 100 index was 83.71 points lower, or down 1.4 per cent at 5,881.37, recording a loss of 0.3 per cent for the week.

Events in Egypt, where police and demonstrators fought running street battles in Cairo in unprecedented protests against president Hosni Mubarak’s rule, made investors cautious.

A fall among mining stocks was the biggest drag on the blue chip index, with Vedanta Resources the worst off, down 4.5 per cent. Investors cited next week’s Chinese new year holidays as a reason for closing positions, on the grounds that demand would briefly slow.

Integrated oils fell, dragged by BG Group as the sector heavyweight reversed recent strong gains linked to Brazil oil find hopes and countering a jump in the crude price linked to rumours of the possible closure of Egypts Suez Canal. US blue chips were down 1 per cent by London’s close, worried by the unrest in Egypt and disappointing results from Ford.

In Britain, following on from a surprise drop in UK GDP this week, data yesterday showed UK consumer confidence tumbled to its lowest in almost two years in January. The data put UK retailers put back under pressure.

Marks Spencer fell 1.2 per cent, while Next lost 1.8 per cent. Both were also feeling the effect of downbeat results on Thursday from peer Hennes Mauritz.

TUI Travel, which gained on Thursday after a trading update, fell 4.5 per cent as Natixis cut it to “neutral” from “buy” mainly on valuation grounds. Inmarsat was the top FTSE 100 gainer, up 2.4 per cent after confirming the second phase of its co-operation deal with US firm LightSquared, which brokers said could see upside to expectations for the value of Inmarsat’s US spectrum.

The news encouraged Liberium Capital to raise its target price for Inmarsat to 950 pence, up from 900 pence.

Broker comment gave a lift to orthopaedics group Smith Nephew, up 0.3 per cent as Matrix hiked its price target, while luxury goods firm Burberry added 0.2 per cent, helped by a Unicredit upgrade to “buy” in a sector review. – (Reuters)