Reuters: Hot Stocks: Britain's FTSE dragged lower by miner weakness, Cyprus vote eyed

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Britain's FTSE dragged lower by miner weakness, Cyprus vote eyed Mar 19th 2013, 11:53 Tue Mar 19, 2013 7:53am EDT * FTSE 100 dips by 0.1 percent * Miners account for all of the index's falls after downgrades * Banks weak as Cypriot bailout vote seems set to fail By Alistair Smout LONDON, March 19 (Reuters) - Britain's top share index fell on Tuesday with demand concerns hitting major mining stocks and uncertainty over the state of a bailout of Cyprus weighing on sentiment for a second consecutive session. Five of the top six fallers were miners. The sector dropped 2.9 percent following broker downgrades and top executives of blue-chip firms warning of softer prices as growth in China's steel production slows. Weak demand from China saw copper prices fell to a four month low. "Copper fell to new lows today, which is hitting the miners, and there are real concerns about the price moving forward which will continue to weigh," Myrto Sokou, analyst at Sucden Private Financial Clients, said. "The problems in the euro zone are apparent, but the bigger surprise is this weakening in demand from China." Global miners Rio Tinto and BHP Billiton fell 3.6 and 3 percent respectively as Goldman Sachs reduced its iron ore price forecasts and cut its recommendations on the firms to "sell" and "neutral". Mexican miner Fresnillo was also among the top losers after Deutsche Bank cut the stock to "sell" from "hold". The blue-chip FTSE 100 slipped 0.1 percent, or 6.24 points, to 6,451.68 points, with falls in the miners enough to take the whole index into negative territory. Underpinning the weakness in the market were concerns over Cyprus. Its parliament was set to reject a divisive tax on bank deposits in a vote scheduled for Tuesday, a government spokesman said, in a move that would push the island closer to a default and banking collapse. The worry that deposits in the banks of other euro zone countries may be vulnerable if they seek help has weighed on financials since the levy was announced. Britain's major banks have substantial exposure to the euro zone, and the FTSE 350 banking index was down 0.4 percent after a 1.3 percent slide on Monday. "Financials are still licking their wounds this morning as we await clarification of the Cyprus bailout agreement and its impact on deposit holders in Cypriot banks," Matt Basi, senior sales trader at CMC Markets, said in a note. "Until such time as Europeans know their money is safe from the sticky fingers of Eurozone ministers, banking stocks are likely to remain under pressure." (Editing by Jeremy Gaunt.) Link this Share this Digg this Email Reprints

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