Headline shares were sharply lower in midday trade, with heavyweight mining stocks leading the rout on the prospect of shrinking growth in China, with banks continuing to suffer on European sovereign debt concerns. At high noon, the FTSE100 was down 95.51 points at 4,976.17 with the FTSE250 off 141.22 points at 9,503.66 and the FTSE Smallcaps 24.97 points lower at 2,696.74. US stock futures suggest heavy opening losses, as investors fret over global economic growth. Dow Jones Industrial Average futures shed 112 points, S&P500 futures lost 13.1 points at 1,057 and Nasdaq 100 futures slipped 25.55 points at 1,810.
LONDON MARKETS
Trading in London followed the weak global trend with reports that the G20 agreed that banks must build up higher levels of capital and liquidity and upcoming EU stress tests providing extra pressure for the financial sector. Doubts over demand for raw materials from China and the wider global market forced miners and oil producers lower.
The mining sector provided the biggest blue chip fallers at midday, with Rio Tinto bottom of the heap, down 147p at 3,109p and BHP Billiton 55.5p lower at 1,826p. Xstrata fell 38.5p at 928.9p and Vedanta Resources dropped 89p to 2,208p. Randgold Resources slumped 135p at 6,425p as gold eased to $1,238 an ounce, while Fresnillo drifted 27p lower at 1,025p.
Oil producers remained under the cosh, with BP's rising clean-up costs sending the shares 6.1p lower at 302.15p. Shell fell 44p at 1,647.5p and BG Group dropped 19p at 1,026.5p as crude slipped below $77 a barrel and the hurricane season got under way in the Gulf of Mexico. Oil services groups suffered in sympathy, with AMEC dropping 28p at 824.5p and Petrofac 46p weaker at 1,187p.
In the financial sphere, banks were under pincer pressures on reports of agreement from G20 constituents to insist on higher levels of capital holdings and an imminent report from the EU expected to include additional stress tests. Barclays was the runt of the litter, off 7.85p at 277.5p, while Standard Chartered lost 20.5p at 1,689.5p and HSBC fell 15.5p at 623.5p, both seen as most vulnerable to any slowdown in Asia. Lloyds Banking Group bucked the trend with a modest rise of 0.34p to 55.75p after revealing it has agreed to exchange all the yen undated subordinated step-up notes issued by HBOS for Lloyds shares.
Insurers were firmly out…
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