FTSE falters, weighed down by mining stocks

Britain's top share index retreated on Tuesday as weaker oil and metals prices weighed on commodity stocks, while motor insurer and repair group AA slumped after posting lower earnings. The blue chip FTSE 100 index was down 2.8 percent at 5,935.84 points at its close, slightly outperforming European indexes.
AA, part of the FTSE 250 mid-cap index, fell 13 percent after it reported a 6 percent decline in first-half earnings.
The FTSE 100 raced to a record high of 7,122.74 points in late April but has since steadily lost ground, hit by concerns over an economic slowdown in China and the prospect of an interest rate rise soon in the United States.
Higher interest rates typically hurt stocks as they boost the appeal of bonds and cash by increasing returns on those assets. The China slowdown has hit oil and metals prices due to China's role as a major global commodities consumer.
"On the back of slower global economic growth, commodity-related stocks are clearly under a lot of pressure," said Dafydd Davies, partner at Charles Hanover Investments.
Oil and copper prices fell on Tuesday, with copper striking a two-week low, pushing down the shares of miners and energy stocks.
The UK mining index, down 5.5 percent, hit a fresh six-year low.
Commodities trader and miner Glencore fell 10.6 percent, dipping below 100.00 pence for the first time and closing at 106.35, its lowest ever level.
Copper miner Antofagasta and miner Anglo American both fell after downgrades from broker Credit Suisse, down 7.3 percent and 6.7 percent respectively.
"Until China demand and emerging market currencies find a floor, it will remain challenging to put an absolute floor on commodity prices," analysts at Credit Suisse said in a note.
In the mid-caps, copper company KAZ Minerals plunged 25.3 percent, closing at an all-time low of 104.4.
"We're getting to the point whereby a number of commodities stocks are looking very downbeaten," said Manoj Ladwa, head of trading at TJM Partners, adding that investors were still wary of buying into the sector despite relatively low valuations.
The FTSE 100 is down by 9.6 percent since the start of 2015.
Although it has rebounded 2.9 percent from a 2015-low of 5,768 points hit in late August, Horizon Stockbroking director Kyri Kangellaris said he would wait to see if the market falls back to those levels before he considers buying back in.