FTSE slumps as miners plumb China depths

United Kingdom shares fell on Tuesday, with a rebound for the battered mining sector failing to offset an outlook cut from heating and plumbing supplier Wolseley and a gloomy ripple effect from a USA healthcare sell-off.

The FTSE 100 index was up 2.6% at 6,061.61 points at its close, in line with the pan-European FTSEurofirst 300 index.

As I wrote earlier this week, there are lots of people with pensions and savings who have taken a nasty hit due to the miner’s dramatic fall from grace since its controversial flotation (although their problems pale by comparison with those of the African workers restructured out of their jobs).

The U.S., which represents the bulk of its profits, saw growth, but suffered a tough period for industrial markets in the fourth quarter that was expected to continue.

“Today’s rally is one part of such a recovery, but for now, we remain firmly below the 6,123 level which would bring about hope for a more protracted period of upside for the FTSE”, Mahony said. Germany’s Dax and France’s Cac 40 both moved higher.

The company’s shares dropped to a new record low of 73p at 15:00, helping push the FTSE 100 down two per cent.

Sainsbury’s was a standout performer in the UK.

Other supermarket companies got a boost from Sainsbury’s trading update, with shares of Wm.

Commodities trading and mining giant Glencore gained ground after a dramatic 29 per cent slump in the previous session, with a rise of 17 per cent, or 11.6p to 80.3p.

Tesco rose 3% or 5.1p to 171.3p while Sainsbury’s added 3.9p to 230p and Morrisons climbed 0.8p to 156.3p.

At the heart of Glencore’s issue is its £20bn debt, which analysts say needs to be restructured, the cost of which is increasing while commodity prices are falling.

The Eurozone’s annual consumer price index fell 0.1% in September compared to a 0.1% increase in August, Eurostat’s flash estimate revealed, missing analysts’ expectations for zero growth.

He said it showed the German-owned discounter – which together with Lidl has been gnawing at the market share of larger rivals – did not have a “magic formula”, adding: “Things are looking better for the UK-listed names”.

Shares of SSE PLC (SSE.LN) rose 4.1% after the utility company said it is on course to achieve its main financial objective (http://www.marketwatch.com/story/sse-on-course-to-achieve-2016-financial-objective-2015-09-30) for fiscal 2016.