UK stocks fell to two-week lows on Thursday as investors took profits across the board and fretted about global growth prospects, though the hard-hit mining sector rebounded towards the end of the session.
Anglo American ended 3.7 percent higher, topping the FTSE 100 leaderboard, followed by gains of around 2 percent for the likes of Rio Tinto, Xstrata and Antofagasta.
Traders said the sector was recovering after strong selling on concern about US growth prospects and ahead of the market debut of a Kazakh copper miner on Friday.
"Maybe the selling that's been done to fund the purchase of Kazakhmys and maybe some of the profit taking is drawing to a close," said one fund manager. News of Prudential Equity Group raising its gold price forecast was seen as another positive factor.
British Airways also managed a 2.8 percent rise as oil prices neared $61 a barrel and touched their lowest level in two months. Fuel represents a large part of the airline's costs.
But despite a handful of gainers, 90 of the UK's 100 blue chips succumbed to the downbeat trend, leaving the FTSE 100 nursing a 55.4-point loss on the session.
It was the second day of heavy falls for the index, which ended at 5,372.4 points, its lowest close since September 21. The sell-off was sparked in part by concerns for the US economy, the world's largest, after officials there indicated more interest rate hikes were likely.
"We've seen a few bad days. It would not surprise me if we see another few bad weeks. But I think before the end of the year there will be a good buying opportunity. I do not see it as the start of any major bear trend. I just think it is a healthy reaction to what has been quite a strong market in recent months," said John Smith, head of investment strategy at Brown Shipley.
He added, however, that there was some concern about the health of the UK economy, with retailers in particular facing tough trading conditions. The latest note of caution came from car parts seller Halfords, which warned on profit margins.
The Bank of England said at midday that it was keeping interest rates on hold at 4.5 percent after its monthly meeting, but economists said future cuts looked likely to help prop up the economy and encourage consumer spending.
"They've got to act quickly to stop the drama in the UK high street turning into a deeper crisis," said David Brown of Bear Stearns.
Sweets maker Cadbury Schweppes was the heaviest decliner, down 4.8 percent after warning its profit margin targets for the year would probably be hit by rising costs. Oil prices and disruption from hurricanes Katrina and Rita have put pressure on the group, which counts Trident gum and Dr Pepper drinks among its brands.
Fellow consumer stock Unilever dropped 2.2 percent in sympathy.
Elsewhere in the market, oil stocks continued to feature prominently among the big fallers.
Cairn Energy and BP both lost over 2 percent each and smaller players were also hit hard. Oil and gas explorer Soco International fell 8.2 percent, followed by drops of about 4 percent each for Tullow Oil and Burren Energy.
"They've had a tremendous rise, major profits upgrades over the last few months, and I think there's some very aggressive profit-taking going on," said Brown Shipley's Smith.
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