London - Britain's top share index fell on Monday, with miners hit by weak data from top metals consumer China and with political jitters in Italy and the United States hurting broad investor sentiment.
Miners took around 11 points off the FTSE 100 after Chinese data unexpectedly pointed to a near-stagnation of private sector factory activity in September.
Fresnillo, Glencore Xstrata, Anglo American were each down more than 3 percent. The mining sector is the index's third-biggest and the only one that is down this year.
“We've been bearishly positioned on miners for 12 to 18 months ... It's a sector that is prone to quite sharp moves quite quickly,” said Stephen Walked, head of equities research and market strategy at Ashcourt Rowan.
“To me the commodities sector really needs a very robust, synchronised global economic upturn and we just don't see that.”
Monday's market retreat was broad, however, with nearly 90 percent of blue-chip stocks in the red.
The FTSE 100 was down 55.87 points, or 0.9 percent, at 6,456.79 points by 12:50 SA time, continuing its retreat after breaking below a key technical support at the 50-day moving average on Friday.
The sudden departure of five Italian centre-right ministers over the weekend left the government only formally in place, rattling markets and raising the possibility of new elections.
“The Italian situation could go either way,” BTIG strategist Nick Xanders said. “I would be cautious.”
Political risk was also in focus in the United States.
Chances looked slim that Republicans and Democrats will strike a deal on funding the federal government before the fiscal year ends at midnight on Monday, raising the prospect of a gradual government shutdown.
Politicians need to reach another deal, on raising the debt ceiling, later this month or the United States will default on some obligations.
“The biggest concern is the potential knock on it might have on the debt ceiling negotiations as well. If the government is in shutdown mode that probably doesn't help the chances of that being sorted out,” said Walker at Ashcourt Rowan.
“Short term, there is certainly the potential that things get a little bit worse ... so if I was sitting on the sidelines in cash, I would be a bit reluctant to launch into the market.” - Reuters