London shares open down; miners hit by China rate woes, weak Rio Tinto Q1
Leading shares opened lower, hit hard by the mining sector as fears China may be forced to raise its interest rate caused a sell-off in the metals sector, dealers said, with disappointing production figures from Rio Tinto also weighing.
At 8.49 am, the FTSE 100 index was 52.2 points behind at 6,397.2 after closing 48.4 points weaker at 6,449.4 yesterday.
The broader FTSE indices also fell into the red in opening deals. Early volume was solid, with 247 mln shares changing hands in 49,083 deals.
In the US overnight, Wall Street was mixed in lacklustre trading though investors pushed the Dow Jones industrials to a new trading high and past 12,800 for the first time. However, stocks showed little overall movement as investors were hesitant about buying into the broader market following disappointing earnings from technology leaders including Yahoo.
The Dow Jones closed 30.84 points higher at a record high of 12,803.84, while the S&P 500 index managed to gain just 1.0 at 1,472.5 and the Nasdaq Composite slipped 6.45 lower at 2,510.50.
Meanwhile, in Asia this morning, stocks were hit by profit-takers, with China-related stocks leading the fall on fears that the mainland's A-share markets may be in for a big correction after hitting new highs repeatedly in recent sessions, traders said, adding that speculation regarding another interest rate hike in China also weighed on sentiment.
The Hang Seng Index ended the morning down 404.71 points at 20,372.38, while Tokyo's Nikkei closed 295.36 lower at 17,371.97.
In London, the FTSE was hard hit by the miners in early deals, with the top eight fallers all mining stocks amid fears China's continuing strong growth could prompt Beijing to announce more interest rate hikes.
The China concerns caused panic selling of copper plays, dealers said, amid fears that any slowdown in China's growth will impact on commodity prices.
Base metals prices eased in response, with gold futures over 3 usd lower at 690.2 an ounce in Asian trade, and both silver and copper prices also on the back foot.
Corporate news in the sector also weighed, after Rio Tinto said output in key commodities such as iron ore in the three months ended March was generally higher than the same quarter a year earlier, reflecting capacity expansions at existing operations, but the quarter report also showed that cyclonic weather affected iron ore output at the group's mines in Australia's north-western Pilbara region.
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