FTSE takes heavy hit due to interest rates fears

London shares were dragged back by heavy losses for mining stocks and renewed concerns over US interest rates today.

The Dow Jones Industrial Average closed 83 points lower last night in the wake of mixed earnings reports and amid worries about the impact of oil prices on corporate performances.

The FTSE 100 Index followed suit and at mid-morning had fallen 22.1 points to stand at 5749.5p.

Stronger than expected GDP numbers added to the worries, as it increased the chances of an interest rate rise in the UK next month.

Miners acted as a weight on the market with Vedanta Resources off 35p at 1267p, Kazakhmys down 23p at 1150p and Antofagasta 13p lower at 396p as copper prices declined.

Any progress that was made came from defensive stocks as Imperial Tobacco, which lifted 21p to 1702p, and Yorkshire Water owner Kelda rose 9.5p to 857p.

Cruise operator Carnival was also up 33p to 2132p after announcing a share buy-back scheme to investors.

Whitbread rose 6p to 1167p after revealing a deal to sell 239 Brewers Fayre and Beefeater sites and a plan to focus on pub restaurants near its Premier Travel Inns. The buyer, Mitchells and Butlers, was also up – progressing 4.75p to 520p.

Meanwhile, Rank Group advanced 2.5p to 194.5p after saying it had completed the sale of its CD and DVD packaging business to New York-based EDC for £3m (€4.4m).

Party Poker owner PartyGaming had been at the top of the risers board after reporting 49% growth in revenues for the three months to June 30.

It also sought to ease concerns about US legislation when it said it would continue to expand aggressively overseas, including in Europe and South America.

Shares then went into negative territory before recovering to stand 4p higher at 91.25p. Second-tier rival 888 Holdings was 3.25p lower at 157.25p, a drop of 2%.