Miners Pull Down FTSE 100 by 0.6%

A widespread drop in the shares of global miners contributed to pulling the FTSE 100 index down by 32 points

Alanna Petroff 29 August, 2012 | 6:28PM

The shares of major mining companies retreated on Wednesday, contributing to the FTSE 100 index tumbling by 32 points, or 0.6%. The miners fell as uncertainty over the global economic outlook continued to persist and copper prices declined.

Companies such as Glencore (GLEN), Rio Tinto (RIO) and Kazakhmys (KAZ) all saw their shares fall. Glencore was the main loser on the FTSE 100, with shares dropping by 4%, after Norway’s sovereign wealth fund announced it was going to oppose Glencore’s takeover of Xstrata (XTA). Shares in the acquisition target, Xstrata, also declined by just over 1.5%.

Out of the 13 miners on the FTSE 100, all but one of them saw their shares fall on Wednesday.

Waiting for Moves from the Fed

This lacklustre day for miners comes as many investors wait on the sidelines to hear from the US Federal Reserve’s chairman, Ben Bernanke, about his potential plans for economic stimulus.

“As Ben Bernanke's much-hyped speech ...  gets ever closer, more and more investors are succumbing to the temptation to sit on their hands. And who can blame them? Opinion is split down the middle on whether we will get any hints from the Fed [about economic stimulus], so most investors will just choose to wait and see,” says trader Ben Critchley from IG Index.

Bernanke’s much-awaited speech will be made at the end of the week at the Jackson Hole summit in the US, and investors are generally hoping for hints of more economic stimulus.

The FTSE 100 index closed the day at 5,744. Meanwhile, the FTSE 250 was relatively unchanged, adding 12 points, or 0.1%, to close at 11,388.

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Securities Mentioned in Article
Security NamePriceChange (%)Morningstar
Glencore Xstrata PLC376.90 GBX0.08
Kazakhmys PLC999.60 GBX-0.54-
Rio Tinto PLC4,263.50 GBX0.51
About Author Alanna Petroff

Alanna Petroff  is a financial journalist with Morningstar UK.