July 5, 2019, 7:45 a.m. EDT

Mining giants and housebuilders drag London markets down

By Callum Keown

Getty Images
The pit at Citic Pacific Mining's Sino Iron magnetite iron ore project in the Pilbara region of Western Australia, AFP PHOTO/ Amy COOPES. (Photo credit should read AMY COOPES/AFP/Getty Images)

Mining giants dragged London markets down after China’s major steel companies launched an investigation into the recent record surge in iron ore prices.

The FTSE 100 (FTSE:UK:UKX)   slipped 0.3% led by the blue-chip index’s heavyweight miners and U.K. housebuilders, after supplier SIG (LON:UK:SHI)   blamed continued weakness in the construction sector for a double digit decline in sales growth.

What’s moving the market?

Mining stocks came under pressure for a third consecutive day following the probe into surging iron ore prices.

A weak trading update from building supplier SIG, which fell 5%, impacted housebuilders across the London markets.

Russ Mould, investment director at AJ Bell, said: “Investors got further insight into the dire state of the U.K. construction sector this week as a first half trading update from building products business SIG revealed a double-digit decline in like-for-like revenue for its domestic operations.

“The news from [the] company follows on from figures earlier this week which showed that June was the worst month for the industry since April 2009, as well as several recent warnings from other construction-related firms.”

Which stocks are active?

Rio Tinto (LON:UK:RIO) suffered the sharpest fall among the FTSE 100 mining giants, weakening 2.5% as Chinese steel firms launched a probe into surging iron ore prices. Rivals Anglo American (LON:UK:AAL)   and Evraz (LON:UK:EVR)   also dropped around 2%.

Building supplier SIG (LON:UK:SHI)   slipped more than 6% as weakness in the U.K. construction sector led to a double digit decline in like-for-like sales growth.

Aviation services company John Menzies (LON:UK:MNZS)   plunged 11.5% after a profit warning, citing weak cargo volumes and flight schedule reductions.

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