FTSE blue-chips under pressure

The London market was on the back foot today as falling commodity prices put pressure on blue-chip stocks.

The London market was on the back foot today as falling commodity prices put pressure on blue-chip stocks.

Lower oil and metal prices meant a poor session for heavyweight mining and petrochemical stocks, while financials fell on news of another bank collapse in the United States.

By the mid-session the FTSE 100 Index was 81.3 points down at 5424.3 - although blue-chips picked up from the day's lows on hopes of a higher US opening after a 2% fall for the Dow Jones Industrial Average yesterday.

In London, heavyweight miner Rio Tinto posted a 55% rise in half-year earnings but shares fell 109p to 5055p amid weakness in the mining sector.

Ferrexpo, the Footsie's leading faller, slipped 9% or 23.5p to 244.5p, while Kazakhmys shed 57p to 1301p and Anglo American lost 112p to 2763p as a stronger US dollar also turned investors away from commodities.

Oil-facing firms were on weaker ground thanks to oil prices below US$113 a barrel, despite concerns over the potential impact of Hurricane Gustav in the Gulf of Mexico. BG Group was down 32p to 1159p, while Royal Dutch Shell slipped 53p to 1809p.

Housebuilders were initially knocked after Bovis Homes revealed first half profits slumped more than 80%. The firm also warned it did not expect an improvement in the foreseeable future and slashed its interim dividend.

However, members of the sector recovered amid reports that under-pressure Taylor Wimpey has secured some breathing space from its banks. Shares in the firm, which reports interims tomorrow, rose more than 9%, or 4.25p to 49.75p.

Figures from the British Bankers' Association showing that mortgage lending did not fall any further during July also helped the sector. Bovis Homes added 16p to 444p, while Bellway gained 14p to 596.5p

Back in the Footsie, Lloyds TSB was the chief casualty in the financial sector, down 9.25p at 260.25p. Royal Bank of Scotland was also off 6p to 214.75p as fears over the health of US financial stocks lingered.

Columbian Bank and Trust became the ninth US bank to fail on Friday while a possible ratings downgrade for giant American Insurance Group also rattled investor sentiment.

FTSE 250 firm Bradford & Bingley, which is due to publish half-year results on Friday, saw shares fall well below its 55p rights issue price - down 2.5p to 51p.

The dozen or so Footsie stocks in the black included Scottish & Southern Energy, which added 8p to 1446p.

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