London midday: Financials, miners pull FTSE 100 to seven-week low

11th Jun 2013 11:23

Falling commodity prices and rising government bond yields resulted in a sell-off on Tuesday morning, as the recent volatility on equity markets continued, sending the FTSE 100 to a seven-week low.The FTSE 100 was trading around the 6,300 markby midday, the first time it has fallen to this level since April 22nd."The positive momentum within the markets yesterday provided some hope that perhaps we had seen the worst of the recent pullback," said Research Analyst Joshua Mahony from Alpari."However, today provides an indication that perhaps we are only just seeing the beginning after many of the key markets broke below key ascending trend-lines in existence since the beginning of this bull market around November 2012."The focus this morning was on the European Central Bank (ECB) as it is expected to defend its Outright Monetary Transactions programme in a two-day hearing in the German constitutional court. The programme has been largely credited for stopping the downward spiral in Eurozone government bond markets and putting the breaks on the crisis. However, plaintiffs argue that the ECB is acting outside European laws that prohibit government financing via the central bank. In fact, the German constitutional court's euro expert Udo di Fabio has warned that the two days of hearings could set events in motion that may eventually force Germany's withdrawal from the single currency. Bonds yields across the board in Europe edged higher this morning. In other news, UK industrial production rose by 0.1% in month in April, according to the latest data from the Office for National Statistics. The consensus estimate had been for no change. Manufacturing output however fell 0.2%, though this was in line with expectations.Overnight, there were no surprises at the Bank of Japan's (BoJ) monetary policy meeting with the central bank leaving its aggressive easing plan in place. Following on from yesterday's upwards revision to first-quarter economic growth, the BoJ said that the economy "has been picking up".FTSE 100: Financials and miners provide a dragThe financial and mining sectors were firmly out of favour this morning as investors' appetite for risk slumped. Aberdeen Asset Management, Old Mutual and Prudential were among the worst performers on the top-tier index.Mining stocks were also weighing heavily on the FTSE 100 this morning as metals prices fell across the board. Fresnillo, Anglo American, Antofagasta and Glencore Xstrata were registering steep losses. Russian mining peers Polymetal and EVRAZ were also lower on the news that they will be exiting the FTSE 100 index this week following some sharp falls so far this year. Lloyds was down after The Times said that contractors at the bank's PPI complaint handling unit were "taught how to play the system to the detriment of clients". Part-nationalised peer RBS was also down early on.Engineering and project management group AMEC fell despite the news that it is to work with BP to provide the oil giant with environmental consulting services across its projects worldwide. Energy services firm Wood Group also undewhelmed after signing its first 'life-of-field' contract through an extension of work in the North Sea for AIM-listed Ithaca Energy worth £140m. FTSE 250: Ocado continues to set all-time highs; Dialights tanksOcado was making impressive gains once again today after the Daily Mail reported rumours that department store M&S could "gatecrash the online grocer's cosy joint venture deal with WM Morrison". FastFT also mentioned the possibility of a takeover, given that the company now has two high-profile partners in Morrison and Waitrose. Meanwhile, market chatter continues to suggest that recent gains reflect traders covering short positions.Lighting, signalling and electronics group Dialight dropped sharply this morning after saying that first-half profits would be adversely affected by weaker sales in the Signal segment and additional costs from the planned extra sales in the Lighting segment. Nevertheless, the company reassured that full-year results would be broadly in line with forecasts.AG Barr and Britvic were both in the red despite the Competition Commission provisionally clearing their proposed merger, as the Chairman of Britvic said that the company is now in a "different place" to last summer when they first agreed to a tie-up. He hinted that the terms may have to be renegotiated once the watchdog presents its final report next month. FTSE 100 - RiserseasyJet (EZJ) 1,234.00p +0.65%ARM Holdings (ARM) 871.50p +0.29%United Utilities Group (UU.) 736.50p +0.27%Royal Dutch Shell 'B' (RDSB) 2,198.50p +0.23%Vodafone Group (VOD) 192.20p +0.23%FTSE 100 - FallersAberdeen Asset Management (ADN) 387.30p -6.47%Fresnillo (FRES) 1,057.00p -5.46%Polymetal International (POLY) 614.50p -4.58%Prudential (PRU) 1,046.00p -4.56%SABMiller (SAB) 3,074.50p -4.53%Old Mutual (OML) 183.50p -4.48%Anglo American (AAL) 1,360.00p -4.33%Evraz (EVR) 119.40p -4.17%Antofagasta (ANTO) 873.00p -4.17%Glencore Xstrata (GLEN) 302.15p -3.87%FTSE 250 - RisersOcado Group (OCDO) 337.60p +8.21%FirstGroup (FGP) 105.10p +4.97%New World Resources A Shares (NWR) 101.90p +2.93%Bovis Homes Group (BVS) 782.00p +2.42%BH Global Ltd. USD Shares (BHGU) 11.99 +2.04%Keller Group (KLR) 922.00p +1.77%Ted Baker (TED) 1,447.00p +1.19%Alent (ALNT) 359.20p +1.18%Bank of Georgia Holdings (BGEO) 1,800.00p +1.07%RPS Group (RPS) 209.70p +0.82%FTSE 250 - FallersDialight (DIA) 1,158.00p -13.45%Man Group (EMG) 85.75p -7.65%Oxford Instruments (OXIG) 1,470.00p -6.19%Intermediate Capital Group (ICP) 428.30p -5.66%Imagination Technologies Group (IMG) 317.90p -5.02%Henderson Group (HGG) 146.00p -4.95%AZ Electronic Materials SA (DI) (AZEM) 300.40p -4.88%Hays (HAS) 84.25p -4.69%Pace (PIC) 226.60p -4.39%Hochschild Mining (HOC) 218.10p -4.34%