FTSE at lowest ebb in six weeks

Falling demand for precious metals sent mining stocks plummeting today as the Footsie slumped to its lowest level in six weeks.

Weaker oil stocks also weighed heavily on the market as strong gains at the start of the month, which saw the FTSE 100 Index around the 5500 mark, were further eroded to leave it 77 points lower today at 5265.2.

Confidence was rocked by miner BHP Billiton, which cut its annual oil and gas production targets by around 8% due to storm damage in the Gulf of Mexico.

Energy heavyweights BP and Royal Dutch Shell were under pressure too with inevitable consequences for the wider market.

Negative sentiment also came from across the Atlantic, where an increase in imports to the US dampened the mood on Wall Street.

The update from BHP left its shares 38.5p lower at 804p, while the rest of the mining sector reacted to a fall in copper prices on the back of lower demand.

It encouraged investors to bank profits following a strong run in mining stocks in recent weeks, leaving Antofagasta, Anglo American, Xstrata, and Rio Tinto all down by more than 4%.

A shiver was also felt by BP and Shell, which have already reported extensive damage to their Gulf of Mexico operations from Hurricane Katrina. BP was down 12p to 622p, while Shell retreated 26p to 1814p.

Along with BG Group and Cairn Energy, which were down 4% and more than 6% respectively, the oil sector makes up around 20% of the market.

Weaker mining and oil stocks covered the top six positions in the FTSE 100 fallers board and overshadowed a rare batch of positive updates from the retail sector – from Body Shop International and WH Smith.

Marks & Spencer continued its good run after producing better-than-expected trading figures on Tuesday, with shares once again near the 400p mark up 1.75p at 397p.

But it was one of only 10 top flight stocks in the black today, as telecoms giant Vodafone retreated 2% to 146.75p, while O2 and Cable & Wireless both fell 3% to 157.5p and 109p respectively.

Outside the Footsie, WH Smith cheered 7% or 22.75p to 364p after chief executive Kate Swann reported annual profits at the top end of expectations and said the company’s revival strategy remained on track.

It was followed higher by the Body Shop after the cosmetics retailer said like-for-like sales rose 4% in its first half and operating profits mirrored the hopes of the market.

The stock gained 9.5p to 219.25p, while fellow retailers Matalan and N Brown also benefited – up 4.5p and 2p to 166.5p and 157p respectively.

The highest Footsie risers were Compass up 3.25p to 194p, AB Foods up 13p to 812p, Cadbury Schweppes ahead 3p to 552p and Reckitt Benckiser up 8p to 1727p.

The heaviest fallers were Cairn Energy down 119p to 1716p, Antofagasta off 74p to 1463p, BHP Billiton down 38.5p to 804p and Anglo American down 74p to 1584p.