Mining and Commodity Stock Retreat as FTSE 100 heads

Mining and commodity stocks led a retreat across the blue-chip index as experts warned the market could test its 2011 low next week. The FTSE 100 fell 90.54 - or 1.55pc - to 5,765.80, while the wider FTSE 250 (FTSE: ^FTMC - news) market came off 125.60 to 11,786.02 after Chinese trade data showed an unexpected drop in copper imports last month.

The FTSE 100 ended at a new two-and-a-half-month low after it was weighed down by weakness in the heavyweight mining sector following a 3pc decline in copper imports to China. Continued concerns over Greece and eurozone sovereign debt also weighed on trader sentiment. Joshua Raymond, chief market strategist at City Index said.

?A continued bearish move next week could certainly open up a revisit of the 2011 low of just below the 5,600 mark.?

Troubled miner Eurasian Natuaral Resources led yesterday?s retreat, tumbling 60 - or 7.48pc - to 742p on speculation that a third independent director is poised to quit the company?s board amid corporate governance concerns.

Platinum producer Lonmin (Berlin: LRH.BE - news) also fell 84p to ?15.35 after cutting its 2011 production target and warning it will exceed cost guidance. Last month, a strike at its Karee operations prompted the mining company to sack 9,000 workers.

Xstrata (EUREX: XTAF.EX - news) and Rio Tinto (Berlin: CRA1.BE - news) fell 32p to ?13.59 and 95?p to ?41.87 respectively as Australia moved closer to agreeing its controversial new 30pc mining tax. The Australian Treasury forecasts the tax will reap A$7.7bn (?5bn) in its first two years, helping the budget return to surplus by fiscal 2012-13. Elsewhere, Vedanta Resources (EUREX: VR9F.EX - news) also dipped 67p to ?20.49, while Anglo American (Berlin: NGLB.BE - news) fell 97?p to ?29.88? and Kazakhmys (Other OTC: KZMYF.PK - news) 34p to ?12.47.

Away from mining and commodities, AstraZeneca (LSE: AZN.L - news) fell 66?p to ?31.63? after analysts at Barclays Capital cut their rating on the pharmaceutical group from overweight to underweight.

In a wide-ranging sector note, BarCap warned the outlook for the pharmaceutical sector looked ?tough?, a prediction that also sent shares in rival GlaxoSmithKline (Other OTC: GLAXF.PK - news) down 18?p to ?12.76?.

?Relative optimism for the pharma sector has grown as manufacturing output measures have retreated from peaks raising growth concerns and engendering a switch into defensive sectors,? it said. ?The outlook for growth remains weak. Pipeline productivity holds the key to perceptions as late-stage R&D newsflow builds against relatively low expectations.?

Whitbread (Other OTC: WTBCF.PK - news) shares slipped 35p to ?15.10 after the leisure group confirmed it planned to shed around 130 general managers from its Premier Inn budget hotel division. The figure was half the 260 job cuts speculated first thing yesterday. Whitbread said there was no change to its planned expansion of Premier Inn this year.

At the other end of the table, Essar Energy (Dusseldorf: 11224817.DU - news) advanced 6.8 to 426.9p, followed by Associated British Foods (Dusseldorf: 719064.DU - news) , which rose 15p to ?10.43 and Johnson Matthey (LSE: JMAT.L - news) , up 4p to ?19.88.

Shares in ARM Holdings (LSE: ARM.L - news) - the chip designer whose technology is used in many of the world?s smartphones - also gained 1 to 567?p with traders citing a bullish note on the company by Redburn Partners.

Redburn said. ?Despite it being a much-loved share trading on 40 times 2012 PE, ARM is still that most precious of equity opportunities, a genuine growth stock and, unequivocally therefore, a 'buy?.?

Among the mid caps, Hays (LSE: HAS.L - news) rose 3.1 to 108.2p on speculation it was a ?2.2bn takeover target for Swiss rival Adecco (VTX: ADEN.VX - news) .

Adecco, the world?s largest recruitment company, declined to comment on the reports but stressed an interest in pursuing smaller bolt-on deals.

Elsewhere across the FTSE 250, JD sports tumbled a further 74 - 7.88pc - to 933?p. On Thursday, the sports retailer fell 40? following a downbeat trading update where it retained its cautious outlook for the rest of the year.