Business

London Market Report

(Close): Mining shares came under pressure on concerns over the strength of China's economy and after a firm that makes conveyor belts for the mining industry issued a profit alert.

Among the big miners, Rio Tinto dropped 4.1% and Anglo American fell 5.7%.

The falls in the mining sector dragged the FTSE 100 lower, with the benchmark index down 26.78 points at 6,844.51.

Worries about China were triggered by news that Beijing had asked local governments to increase spending.

China is the world's biggest consumer of metals, so its economic strength is watched closely by the mining industry.

Confidence in the sector was also knocked by a profit warning from conveyor belt maker Fenner. Shares in the FTSE 250 company sank 40p, or 10.2%, to 350p after it said profits would miss targets because of worsening trading conditions in the US.

Fenner also said it had unexpectedly failed to win an Australian iron ore contract.

"I have to say we are somewhat confused and bemused as to why we were not awarded that contract," said Fenner's chief executive Nicholas Hobson.

"We had effectively been told by the customer that our name was on the drawing and we were going to receive that order."

Shares in medical devices firm Smith & Nephew rose 17p, or 1.7%, to £10.46 as the takeover speculation surrounding the firm refused to go away.

Earlier in the week, its shares jumped on reports that US firm Stryker was considering a takeover bid, although these reports were later denied by Stryker.

On the currency markets, the pound rose 0.3% against the dollar to $1.6774 and was almost unchanged against the euro at 1.2297 euros.