Mining Stocks Fall Sharply on China Concerns
September 22 2015 - 8:10AM
Dow Jones News
LONDON—Share prices in U.K.-listed global miners were hit hard
on Tuesday with commodities giant Glencore PLC leading the pack
down on continued fears that China's economic slowdown would cause
commodities prices to tumble further.
Shares in Swiss trader and producer Glencore fell to a new
intraday low of 107 pence a share, down more than 9% on the day,
making it the worst performer in the U.K.'s FTSE 100 index.
U.K.-listed Anglo American PLC was the second-worst performer,
falling 6.9%, while Anglo-Australian miners BHP Billiton Ltd. and
Rio Tinto PLC ranked among the 10 biggest decliners, each down
about 4.3%.
The 5% drop in the FTSE 350 mining index and 2.2% drop in the
FTSE 100 index extended a pattern of market volatility since the
U.S. Federal Reserve said on Thursday it wasn't raising interest
rates this month. The Fed's decision sparked renewed fears over the
sluggish pace of global growth and has left investors
second-guessing when the first rate move will come.
Miners have been roiled by a long rout in commodities prices,
with gold, copper and iron ore trading at multiyear lows in recent
weeks.
Analysts at Credit Suisse on Tuesday slashed earnings estimates
across the mining sector.
"Until China demand and emerging market currencies find a floor,
it will remain challenging to put an absolute floor on commodity
prices," Credit Suisse said in a note.
Credit-ratings firm Moody's Investors Service said on Tuesday
that miners are likely be the hardest hit of any sector in Europe,
the Middle East and Africa as a result of China's economic
slowdown.
It estimates about 20%-30% of EMEA mining output, in terms of
revenue, is exported to China both directly and indirectly, the
highest of all sectors.
Glencore has been the worst performer of U.K.-listed miners this
year as it seeks to reduce it heavy debt burden, among the largest
in the industry, to safeguard its credit ratings. Glencore's shares
are down more than 60% since the beginning of the year and are down
more than three quarters since the company's London share listing
in 2011.
Tommy Stubbington in London contributed to this article.
Write to Alex MacDonald at alex.macdonald@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
September 22, 2015 07:55 ET (11:55 GMT)
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