Slide in mining stocks pulls Britain's FTSE lower

LONDON: A slump in Anglo American shares hit UK-listed miners on Tuesday, dragging Britain's main share index to a fourth consecutive day of losses. Anglo American shares fell 12.3 percent to a record low after the company suspended dividends for the second half of this year.

This was the stock's biggest drop since February 2009, and trading was 2.5 percent of its 90-day average.

British mining stocks have fallen around 50 percent so far in 2015, due to a slowdown in China, the world's biggest consumer of metals. Data on Tuesday showed that China's imports fell for the 13th consecutive month with an 8.7 percent decline in November compared to a year earlier, adding to uncertainty about the broader economic outlook for the country.

"The miners will probably continue to weaken while the Chinese economic outlook remains a concern," Beaufort Securities sales trader Basil Petrides said.

The blue-chip FTSE 100 index was down by 1.4 percent at 6,135.22 points at its close, with the FTSE 350 Mining index losing over 7 percent, its biggest one-day fall since the end of September.

Packaging and paper company Mondi also fell 7.6 percent, which traders attributed to a downgrade on the stock from Bank of America Merrill Lynch.

Oil stocks outperformed the market, with BP closing in positive territory, gaining 0.1 percent, and Royal Dutch Shell down only 0.1 percent, tracking gains in Brent Crude which rebounded with US crude.

Supermarket group Sainsbury closed 1.2 percent higher, which traders attributed to positive broker notes on the food retailers along with short-covering on the beaten-up sector, which has been hit by a price war with German discounters Aldi and Lidl.

Analysts at Bernstein wrote in a research note that Sainsbury and Tesco had managed to protect some of their prices, which gave a lift to those stocks, although Tesco reversed its gains to close 0.3 percent lower.

The FTSE 100 hit a record high of 7,122.74 points in April but has since lost ground, due to concerns over China and the impact of a possible U.S interest rate rise in December.

The index is currently down more than 6 percent so far in 2015.