FTSE 100 OPEN: Miners drop as China data draws concern
Mining was the hardest hit FTSE 100 sector in early trading as signs emerged of slowing in the Chinese economy, with manufacturing data dropping to a seven-month low.
The HSBC Flash China Manufacturing PMI (Purchasing Managers’ Index) dropped to 48.1 from 48.4 in May.
Hongbin Qu, chief economist for China and co-head of Asian economic research at HSBC, says: “China’s manufacturing sector continued to slow in June, though the pace of slowdown seems to be slowing.
“With external headwinds reamining strong, exports are likely to decelerate in the coming months. The share fall of prices and moderation of new orders suggest weak domestic demand, posing destocking pressures for Chinese manufacturers.
“All will likely weigh on the jobs market. As such we expect more decisive policy stimulus to reverse the growth slowdown.”
The biggest falles were Xstrata and Vedanta Resources (at 0824 BST), both dropping 3.1% to 843.1p and 48p, respectively, Commodities trader Glencore International slipped 3% to 323.25p, with Kazakhmys also down 3% dalling to 733p. Antofagasta fell 2.5% to 1,094p.
Consumer goods company Reckitt Benckiser was the biggest climber, up 1.1% to 3,404p (at 0822 BST), while United Utilities and Glaxosmithkline both rose 0.8% to 661.5p and 1,475p, respectively. Temporary power provider Aggreko rose 0.7% to 2,113p, while Financial Times publisher Pearson also climbed 0.7% higher to 2,113p.
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