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Energy, mining stocks drag FTSE 100; Cineworld slides

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Shivani Kumaresan and Amal S
·2-min read
FILE PHOTO: A man wearing a protective face mask walks past the London Stock Exchange Group building in the City of London financial district, whilst British stocks tumble as investors fear that the coronavirus outbreak could stall the global economy, in L
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By Shivani Kumaresan and Amal S

(Reuters) - London's FTSE 100 ended lower on Thursday on a slide in energy and mining stocks, while concerns over renewed coronavirus lockdowns in Europe dented optimism for a swift economic recovery.

The blue-chip FTSE 100 index ended 0.6% down, with oil heavyweights BP Plc and Royal Dutch Shell Plc falling 2.6% and 2.9% respectively, weighed by weaker crude prices. [O/R]

Miners including Rio Tinto, Anglo American, Glencore and BHP were among the biggest drags, falling between 1.3% and 3.9%.

"Investors seem increasingly concerned that the reopening of the global economy is going to experience more setbacks, meaning it is no longer a given that we'll see soaring commodities demand," said Russ Mould, director at investment platform AJ Bell.

"The market was high on vaccine-inspired euphoria in late 2020, pricing in a lot of future earnings growth before it happened. Now reality is sinking in that earnings forecasts could turn out to be too optimistic."

The FTSE 100 and the mid-cap FTSE 250 indexes have recovered more than 36% and 72%, respectively, from a coronavirus-driven crash last year as investors bet on a vaccine-led economic rebound. But a recent rise in coronavirus cases has dampened sentiment. (Graphic: https://tmsnrt.rs/34pvUyi)

Meanwhile, Bank of England Chief Economist Andy Haldane said he remained confident that Britain's economy was poised for a quick bounce-back as the country races ahead with its coronavirus vaccinations and restrictions are lifted.

The domestically focused mid-cap FTSE 250 fell 0.6%, weighed down by consumer discretionary stocks.

Cineworld fell 7.6% to the bottom of the mid-cap index, after saying it plans to ask shareholders to approve a raise in its debt ceiling next month to allow it to borrow more money to shore up its shattered finances, following a $3 billion loss in 2020.

Rio Tinto fell 1.3% after the largest minority shareholder in miner's Mongolian copper project Oyu Tolgoi has filed a class action lawsuit in New York, claiming the company concealed massive cost overruns and delays.

(Reporting by Shivani Kumaresan and Amal S in Bengaluru; Editing by Subhranshu Sahu and Lisa Shumaker)