London close: Stocks led lower by mining stocks as commodity prices drag

LONDON (ShareCast) - (ShareCast News) - The FTSE 100 was dragged lower by a slump in mining stocks following weak Chinese data and broadly bearish sentiment in the commodities market. Glencore (Xetra: A1JAGV - news) and Anglo American (LSE: AAL.L - news) were the top fallers after Investec (LSE: INVP.L - news) said the challenging environment for the sector calls into question the equity value of the mining companies. The note from the brokerage came as Glencore agreed to sell its Araguaia nickel project to Horizonte Minerals (LSE: HZM.L - news) for a discount price of $8m.

Other miners, including BHP Billiton (NYSE: BBL - news) and Rio Tinto (LSE: RIO.L - news) , also declined as commodity prices dropped and a report showed an 8.8% decrease in Chinese industrial profits in August, adding to concerns about the nation's slowdown.

"None of the major mining companies could avoid the chaos of the panic selling, and it will be a long time before confidence is restored," said IG (LSE: IGG.L - news) 's market analyst David Madden.

Elsewhere in Asia, Bank of Japan governor Haruhiko Kuroda said inflation would not reach 2% without further improvement in wages, employment and prices.

In European news, pro-independence parties in Spain's Catalonia region won an absolute majority in regional elections but they fell just short of getting 50% of the vote, winning 1.9m out of 4m ballots cast. Spain's central government in Madrid said it would challenge the move towards independence but the pro-independence parties are expected to form a coalition.

US data, interest rates Personal (LSE: PGH.L - news) spending in the US rose 0.4% in August from a month earlier, the Commerce Department revealed, beating forecast of 0.3% growth. Personal incomes climbed 0.3% in August, worse than the 0.4% rise expected.

"Admittedly, the more modest 0.3% month-on-month increase in personal income last month is a little discouraging at first glance," said Paul Ashworth, chief US economist at Capital Economics.

"But there are few signs of weakness linked to the labour market. Wages and salaries increased by a strong 0.5% month-on-month in August, following an even bigger 0.6% month-on-month rise in July." Another report showed US pending home sales fell unexpectedly last month to reach their lowest-level in five months. The index from the National Association of Realtors decreased 1.4% month-on-month in August to 109.4 compared with analysts' expectations for a 0.4% gain and with a 0.5% increase in the previous month.

Meanwhile, Federal Reserve official William Dudley said the central bank will "probably" raise interest rates later this year. Speaking at an event in New York hosted by The Wall Street Journal the president of the New York Fed said, "I think that the economy is doing pretty well", although his expectation was for growth in the second half to be "a little bit weaker" than the first half.

His remarks mirrored that of Fed Chair Janet Yellen's last week when she said a rate hike was expected this year unless the global economic outlook worsened.

Companies SABMiller (Xetra: BRW1.DE - news) jumped following a Sunday Times report that Anheuser-Busch InBev SA could bid about $106m for the company much sooner than originally anticipated. Talks between the two brewing giants are said to have been warming up and carried on over the weekend.

Vodafone dropped after ending talks with Liberty Global (NasdaqGS: LBTYA - news) about a merger of the European businesses.

BAE Systems (LSE: BA.L - news) gained after Bernstein upgraded the stock 'outperform' from 'market perform', with an unchanged price target price of 545p.

Ultra Electronics (Other OTC: UEHPY - news) rallied after JP Morgan Cazenove upgraded the stock to 'overweight' from 'neutral'.

Home Retail Group advanced after Cantor Fitzgerald upgraded the company to 'buy' from 'hold'.

Market Movers techMARK 3,006.07 -1.78% FTSE 100 5,958.86 -2.46% FTSE 250 16,614.16 -1.11% FTSE 100 - Risers SABMiller (Amsterdam: MI8.AS - news) (SAB) 3,634.50p +1.30% BAE Systems (BA.) 444.50p +1.02% ITV (ITV (LSE: ITV.L - news) ) 250.50p +0.93% National Grid (LSE: NG.L - news) (NG.) 898.00p +0.80% Morrison (Wm) Supermarkets (MRW) 155.50p +0.78% Sky (Amsterdam: BK8.AS - news) (SKY (LSE: BSY.L - news) ) 1,041.00p +0.68% Associated British Foods (LSE: ABF.L - news) (ABF) 3,251.00p +0.31% FTSE 100 - Fallers Glencore (Amsterdam: GX8.AS - news) (GLEN) 68.62p -29.42% Anglo American (AAL) 552.70p -10.09% BHP Billiton (BLT) 964.10p -6.03% Antofagasta (LSE: ANTO.L - news) (ANTO) 481.00p -4.94% Standard Chartered (BSE: 580001.BO - news) (STAN) 627.80p -4.91% Vodafone Group (NasdaqGS: VOD - news) (VOD) 207.20p -4.80% Rio Tinto (RIO) 2,111.00p -4.78% ARM Holdings (LSE: ARM.L - news) (ARM) 940.00p -4.28% Johnson Matthey (LSE: JMAT.L - news) (JMAT) 2,415.00p -3.94% Barclays (Swiss: BARC.SW - news) (BARC) 245.20p -3.82% FTSE 250 - Risers Home Retail Group (HOME) 136.30p +2.10% Renishaw (RSW) 2,011.00p +1.98% Ultra Electronics Holdings (ULE) 1,684.00p +1.51% Poundland Group (Other OTC: PDLDF - news) (PLND) 279.20p +1.42% Saga (Frankfurt: 2S8.F - news) (SAGA (LSE: SAGA.L - news) ) 204.00p +1.34% Ophir Energy (Other OTC: OPGYF - news) (OPHR) 82.30p +1.29% Mitie Group (Other OTC: MITFF - news) (MTO) 287.40p +1.23% AO World (Other OTC: AOWDF - news) (AO.) 161.80p +1.12% Big Yellow Group (BYG) 719.00p +0.98% Ted Baker (Other OTC: TBAKF - news) (TED) 3,195.00p +0.95% FTSE 250 - Fallers Kaz Minerals (LSE: KAZ.L - news) (KAZ) 74.75p -26.35% Allied Minds (Other OTC: ALLWF - news) (ALM) 334.10p -12.08% Tullow Oil (LSE: TLW.L - news) (TLW) 157.60p -7.02% Worldwide Healthcare Trust (WWH) 1,700.00p -6.90% Just Retirement Group (JRG) 162.40p -6.67% Premier Oil (LSE: PMO.L - news) (PMO) 63.10p -6.03% Vedanta Resources (Other OTC: VDNRF - news) (VED) 429.10p -5.78% John Laing Group (Frankfurt: JL0.F - news) (JLG) 190.00p -4.95% Weir Group (WEIR) 1,114.00p -4.46% CLS Holdings (LSE: CLI.L - news) (CLI) 1,795.00p -4.22% FTSE TechMARK - Risers BATM Advanced Communications Ltd (Other OTC: BTAVF - news) . (BVC) 20.75p +2.47% Filtronic (FTC) 6.62p +1.92% Torotrak (TRK) 6.85p +1.86% SDL (Shenzhen: 002658.SZ - news) (SDL (LSE: SDL.L - news) ) 329.00p +1.86% Consort Medical (Other OTC: CSRMF - news) (CSRT) 934.50p +1.03% NCC Group (LSE: NCC.L - news) (NCC (BSE: NCC6.BO - news) ) 270.25p +0.84% Ricardo (RCDO) 900.00p +0.61% IShares Euro Gov Bond 7-10YR UCITS ETF (IEGM) € 202.30 +0.37% Dialight (DIA (Amsterdam: DI6.AS - news) ) 630.00p +0.32% FTSE TechMARK - Fallers Oxford Biomedica (LSE: OXB.L - news) (OXB) 8.35p -2.34% RM (RM (LSE: RM.L - news) .) 162.00p -1.82% Oxford Instruments (Other OTC: OXGGY - news) (OXIG) 566.50p -1.56% XP Power Ltd (LSE: XPP.L - news) . (DI (KSE: 003160.KS - news) ) (XPP) 1,575.00p -1.44% Skyepharma (SKP) 359.75p -0.90% Sepura (SEPU) 172.50p -0.72% E2V Technologies (LSE: E2V.L - news) (E2V) 227.50p -0.66% Innovation Group (Other OTC: INVGF - news) (TIG) 39.00p -0.64% Spirent Communications (Other OTC: SPMYY - news) (SPT (Taiwan OTC: 8431.TWO - news) ) 74.25p -0.34% KCOM Group (LSE: KCOM.L - news) (KCOM) 89.75p -0.28%