London close: China concerns sink Footsie

20th Jan 2011 16:31

Blue chips closed down more than 100 points as hefty losses in the mining sector dragged the whole index down.The index fell below 5,900 points for the first time this year as strong growth in China stoked speculation of an interest rate rise to cool the economy and cap inflation.Miners are heavily dependent on China's appetite for raw materials and the speculation sparked a rash of selling across the sector. Fresnillo, Xstrata and African Barrick were the worst affected.Rising prices were a feature in the UK as well, with Associated British Foods cautioning that rising commodity prices are hitting margins while the weather-hit sugar crop will trim annual profits. Revenue at constant exchange rates was up 7%.Engineer Invensys was heavily sold as orders fell at the rail division and it reported a "softening" in demand for controls. Operating profit before exceptional items was the same as last year, keeping the firm on course to deliver an "improved" performance for the full year, it said.Insurance group RSA Insurance also fell. It had a tough winter, with losses relating to the weather in November and December £142m more than normal. For the year as a whole the weather impact was around £255m above normal levels.The extreme weather over Christmas kept drinkers at home, taking an estimated £2m off Enterprise Inns' first quarter operating profit, Britain's biggest pub owner said. Enterprise said the disappointing trading came after a solid start to the year. Net income was down by 1% during the quarter, with net income per pub down by about 2%. EasyJet was another victim of the weather. The budget airline said bad weather and strike action towards the end of last year cost it a total of £31m, but it was its comments about higher fuel costs hitting this year that really spooked investors.Power systems developer Rolls-Royce has bagged a $250m long term maintenance support contract from Cathay Pacific airline. Shares in Laura Ashley jumped after it performed better than anticipated since December and now expects full year profits to be "significantly higher than earlier expectations."Communications equipment manufacturer Filtronic tumbled as it warned it could lose business following the acquisition of Nera Networks by Nasdaq-quoted Ceragon Networks. Shares in food producer Uniq fell by more than 10% after it announced that its desserts business at Minsterley will lose £10m of annualised revenues from April. AIM-quoted Davenham says that it is in talks with its major shareholder about a reconstruction of the business but management continues to warn that shareholders will probably not get any value from their shares.FTSE 100 - RisersBarclays (BARC) 303.25p +2.40%National Grid (NG.) 539.00p +1.51%Capital Shopping Centres Group (CSCG) 377.50p +1.18%Autonomy Corporation (AU.) 1,424.00p +1.14%FTSE 100 - FallersInvensys (ISYS) 329.60p -7.78%Fresnillo (FRES) 1,346.00p -5.87%African Barrick Gold (ABG) 518.00p -5.39%Kazakhmys (KAZ) 1,538.00p -5.18%FTSE 250 - RisersOcado Group (OCDO) 213.50p +2.89%Spirent Communications (SPT) 142.00p +1.87%Renishaw (RSW) 1,338.00p +1.29%Catlin Group Ltd. (CGL) 371.00p +1.06%FTSE 250 - FallerseasyJet (EZJ) 382.00p -16.19%Centamin Egypt Ltd. (CEY) 146.40p -7.05%Elementis (ELM) 125.00p -6.99%Fenner (FENR) 348.30p -6.95%