Britain’s top share index extended recent declines on Monday as continued weakness in metals prices saw mining shares hit multi-year lows.
Britain’s FTSE 100 was down 26.65 points, 0.4 per cent lower, at 6,524.09 by 0818 GMT. It fell 2.5 per cent last week as commodity prices dropped after China devalued its currency.
Shares in mining companies came under pressure again on Monday, hitting a six-year low as the price of copper fell.
Mining shares have fallen over 60 per cent since the end of 2010 as global demand for commodities has slowed, culminating in a move by China’s central bank to weaken its currency.
“The mining companies have been in a bear market for several years and at some point they will look cheap,” said Manoj Ladwa, head of trading at TJM Partners.
“Hopefully the effects of the yuan devaluation will be fully priced in over the next few weeks or so, and the sector can move back up again.”
Global miner Glencore fell 1.5 per cent to an all-time low after price-target cuts from Exane BNP Paribas and Canaccord Genuity.
Peer BHP Billiton also dropped 1.5 per cent after a downgrade by Deutsche Bank.
Among risers, plumbing supplies group Wolseley gained 1.2 per cent after Citi highlighted its potential for market share gains, with the bank raising its rating on the stock to “buy” from “hold”.
TUI Travel rose 1 percent, taking its rally since last week - when it said earnings would come in at the top end of forecasts - to over 12 per cent. Deutsche Bank was the latest to lift its target price on the stock.
“The raised guidance and Q3 results have led us to upgrade our forecasts by 9 percent for (2015),” analysts at Deutsche Bank said in a note.
TUI, the world's largest leisure tourism group, is also considering a spin-off of its non-core assets, which have turnover of about €3 billion, London's Times newspaper reported on Monday.
Traders said such a deal would help TUI to boost its balance sheet.
Reuters
