* FTSE 100 down 0.2 pct
* Miners hit by China growth concerns
* Mining (LSE: MIR.L – news) conveyor belt maker Fenner (LSE: FENR.L – news) warns on profits
By Tricia Wright
LONDON, May 30 (Reuters) – Britain’s top shares lost ground
on Friday, knocked by miners on jitters over China’s growth as a
profit warning from Fenner threw concerns about corporate
earnings back into focus.
Miners sank 1.9 percent, the biggest drags on
the FTSE 100, as worries resurfaced about the health of China’s
economy after Beijing called on local governments to speed up
their spending over the next month to boost activity, ahead of a
manufacturing gauge at the weekend.
China is the world’s top metals consumer.
The sector weakness accounted for all of the FTSE 100’s
decline, with the index down 10.88 points, or 0.2 percent, at
6,860.41 points by 0810 GMT.
Earlier this month, the index climbed to 6,894.88, the
highest level since December 1999, when it set a record peak of
6,950.60 points.
It is just 0.5 percent shy of this year’s high, but analysts
reckon it could struggle to make much near-term progress. While
equity markets have been buoyed in the past weeks by a burst of
deal-making and bids, a lacklustre corporate results season made
some investors nervous.
Underscoring those concerns Fenner, which makes
conveyor belts for the mining industry, said it might miss
market expectations for full-year profit, partly due to weakness
in the U.S. coal sector.
That sent its shares down 12.3 percent, the top FTSE 250
faller by some margin, with volume at more than twice
its 90-day daily average.
“There are still too many (warnings) for people to be
entirely comfortable with having enough faith in forecasts that
you really need to justify the (valuation) multiples that we’ve
got at the moment,” Peel Hunt equity strategist Ian Williams
said.
He saw little scope for decent gains from UK equities until
at least mid-year, enabling earnings to catch up and perhaps
laying the ground for a rally into the end of the year.
The FTSE 100 and FTSE 250 indexes are trading on respective
12-month forward price/earnings ratios of 13.7 times and 14.7
times, against their ten-year averages of 11.7 and 12.8 times,
Thomson Reuters Datastream shows.
(Reporting by Tricia Wright: Editing by John Stonestreet)