Britain's FTSE extends losses as miners slip

LONDON: Britain's top share index extended the previous session's losses on Tuesday, with weaker miners hit by a sharp decline in metals prices outweighing encouraging updates from companies such as Vodafone and Experian.

The UK mining index fell 1.8 percent after copper prices headed towards a six-year low on a firmer dollar and prolonged economic weakness in top metals consumer China.

The mining sector also came under pressure following a bearish research report from Barclays.

Barclays analysts said that it was hard to see what might pull the sector out of its tailspin as an increase in demand seemed unlikely, given the state of China's economy. They downgraded the sector to "neutral" from "positive".

"Metals and miners continue to face strong headwinds as the Chinese economy continues to show no signs of stability," said Jawaid Afsar, senior trader at Securequity.

"With a rate hike cycle in the United States possibly starting in December, the sector will face additional pressure as the dollar strength will hurt earning of mining companies." Anglo American, Antofagasta, Glencore and BHP Billiton fell 2.1 to 5.4 percent. The blue-chip FTSE 100 index was down 0.3 percent at 6,274.84 points by 0946 GMT after falling 0.9 percent in the previous session. The index is down more than 4 percent so far this year. However, it was not all doom and gloom as shares in some specific companies were supported by earnings updates.

Vodafone rose 4.3 percent after the world's second largest mobile operator reported a better-than-expected acceleration in revenue growth in the second quarter, helping it return to earnings growth for the first half and nudge its annual expectations towards the top of its guidance.

Experian shares rose 6.5 percent after the world's biggest credit data company raised its interim dividend by 2 percent and said it had got good organic revenue growth momentum. Some analysts were cautiously optimistic on the company's outlook.

"Conditions through the H1 period appear to have been as tough as expected, particularly on the exchange rate front, but we note that in continuing activities organic progress appears to be improving in targeted areas -- particularly credit related in North America," Shore Capital analyst Robin Speakman said.

Shares in small-cap company Premier Foods surged 16 percent after demand for products like Oxo seasonings and Bisto gravy helped it to report its first quarterly branded food sales gain in two years.