FTSE sharply lower in early deals as mining stocks tumble

MORNING REPORT: Headline shares were sharply lower early on, as tumbling commodity prices sent miners and oil majors lower, with aero-engine maker Rolls-Royce a rare gainer as it announced a fix for its Trent 900 problem.

At 8:30am, the FTSE100 was down 95.15 points at 5,720.08, the FTSE250 tumbled 122.4 points at 10,776.7 and the FTSE Smallcaps lost 9.75 points at 3,050.04.

Tumbling metals prices and uncertainties over the outcome of the G20 summit coloured early trading today in London, with the heavyweight miners dragging the main index deeply into the red.

In early trade, only two blue chip stocks showed gains, Rolls-Royce and Royal Bank of Scotland.

Despite Rolls-Royce announcing that the Trent 900 engines’ problems would impact growth this year, investors were relieved when the company said it had pinpointed the component responsible for an oil fire, which would now be replaced across the fleet. Rolls-Royce shares surged 14p at 598p in response.

RBS bucked the market trend with a gain of 0.73p at 41.75p, while all of its peers lost ground. Lloyds slipped 0.93p at 67.66p and Barclays fell 4p at 280.9p.

The main villains of the piece this morning were the miners, slumping heavily as metals prices eased on dollar strength and concerns over growth.

Xstrata was the weakest of the bunch, down 62.5p at 1,356.5p, while Antofagasta gave back 61p at 1,411p and Anglo American fell 124p at 2,931p.

Oil majors were also in trouble as the price of crude eased back towards $86 a barrel, with Shell down 15p at 1,991.5p and BP off 4.85p at 444.95p.

Retailers were under pressure as the latest data from Nationwide revealed a further slump in consumer confidence last month, with fashion house Next sliding 20p at 2,108p and luxury brand Burberry 13.5p lower at 993.5p.

British Airways dived 3.7p at 260.5p as its prolonged clash with cabin crew moved on to a new phase.

Other notable casualties included satellite communications operator Inmarsat, down 20.5p at 666p, software house Autonomy, down 28p at 1,3391p, and household goods conglomerate Reckitt Benckiser, 53p weaker at 3,506p.