FTSE dragged down by mining-sector sell-off

LONDON (Reuters) - FTSE 100 fell 1 percent on Friday, slightly underperforming broader European equities, with a slump in commodity shares tracking a sharp drop in metals and oil prices.

Men climbs steps next to a share price ticker at the London Stock Exchange in the City of London November 1, 2011. REUTERS/Andrew Winning

Worries over emerging markets and Chinese growth have roiled commodity prices and hit the blue-chip FTSE 100 index, which is comparatively more exposed to natural resources and energy firms, harder than other pan-European indexes.

Some strong second-quarter company results failed to offset that impact on Friday, with the FTSE closing down 1.1 percent at 6,579.81 points.

Miner Lonmin slumped 17.4 percent to an all-time low while Glencore and Antofagasta fell 4.5 to 6.3 percent. Platinum producer Lonmin said it planned to close or mothball several mine shafts in a bid to survive plunging prices.

Miner Anglo American closed down 3.5 percent despite maintaining its interim dividend.

“The most dominant market force this Friday was ... the commodity sell-off,” said Connor Campbell, analyst at spread-bet firm Spreadex.

There were some positives from results season. Vodafone rose more than 2 percent after reporting an acceleration in its main quarterly sales growth as a cable TV acquisition in its biggest market Germany lifted sales and consolidated the overall return to growth for the world’s second-largest mobile operator.

House-builders and property stocks also got a lift on a day when data showed mortgage approvals in Britain in June rose to their highest since March last year. Broker recommendations helped to put Land Securities and British Land among the top 10 performing blue-chips in the UK.

Pearson, the group selling the Financial Times in a $1.3 billion deal, fell 1.2 percent despite announcing an increase to its dividend and confirming guidance. Traders said the lack of an upgrade to its outlook was a negative for the stock.

Diageo dropped 2.5 percent after the U.S. Securities and Exchange Commission announced an investigation into whether the liquor company has been shipping excess inventory to distributors to boost its results.

Reporting by Liisa Tuhkanen; Editing by Catherine Evans