London shares weak at open after global markets drop; commodities fall

UK blue chips fell back in early deals this morning in tandem with sharp declines overnight on Wall Street and in Asia, with ongoing worries about the health of financial stocks and the fallout from weak commodity prices impacting on heavyweight banks and mining issues once again.

At 9.11 am, the FTSE 100 index was 37.1 points lower at 5,508.5, after closing 60.2 points weaker Wednesday at 5,545.6

All the broader FTSE indices were weak as well, with the FTSE 250 index down 80.4 points at 9,470.8. Early volume was solid, with 314 mln shares changing hands in 92,601 deals.

Overnight on Wall Street, the DJIA closed 293.00 points lower at 12,099.66, while the S&P 500 index lost 32.32 points to end at 1,298.42, and the Nasdaq composite index fell 58.30 points to finish at 2,209.96.

Today in Asia, Japanese markets were closed for a public holiday but the Hang Seng index finished 758.72 points weak at 21,108.22 led lower by property stocks and commodity issues.

In London, miners topped the FTSE 100 fallers board as gold and other metal prices tumbled amid worries over the global economy and as a rise in the US dollar, triggered by the US Federal Reserve's less-than-expected rate cut Tuesday, made the cost of owning commodities more expensive.

Vedanta was the worst off, down 121 pence at 1,889, with Anglo American, down 167 pence at 2,744, Rio Tinto off 238 pence at 4,832, and Xstrata down 162 pence at 3,554.

Aside from metals groups, shares in hedge fund manager Man Group dropped 21 pence to 510 as worries over the health of its US-listed business MF Global continued to take its toll.

Shares in MF Global dropped sharply earlier this week with worries over the health of US financials exacerbated by concerns over the impact of a big commodity derivatives loss from a rogue trader at the firm.

Meanwhile Rolls-Royce shares shed 9-1/4 pence to 399 as worries over the potential impact on its earnings of rumoured delays to the production of Boeing's 787 Dreamliner aircraft led Evolution Securities to repeat its 'sell' stance on the aero engines manufacturer.