Leading shares continue to hover around the day's lows, as an opening fall on Wall Street adds to investor uncertainty.
The spark for the renewed sell-off - following yesterday's declines in the wake of disappointing results from Goldman Sachs - was the fear that Chinese interest rates were likely to be raised, after its overheating economy grew by 10.3% last year.
On top of that came disappointing UK manufacturing news from the CBI, with orders down sharply and inflationary pressures evident. News of better than expected US weekly jobless claims and existing home sales, not to mention good figures from Morgan Stanley, have done little to halt the declines.
So with the Dow Jones Industrial Average down around 20 points, the FTSE 100 has fallen 85.43 points to 5891.27, on course for its lowest close since late December.
Given the Chinese news - and the negative implications for commodities demand if the country does raise rates - it is no surprise the mining sector is under pressure. Eurasian Natural Resources Corporation is down 51p to �10.18 and Kazakhmys has lost 75p to �15.47. Precious metal producers are far from immune, with Mexican gold and silver miner Fresnillo falling 74p to �13.56 and African Barrick Gold down 27p at 520.5p.
Banks, which have been surprisingly strong given renewed calls for a break up of their business, have also been lifted by the Morgan Stanley results. Barclays is 6.15p better at 302.3p while Lloyds Banking Group is up 0.71p at 66.92p. A reasonably positive note on the sector from Investec is also helping.
Source: http://www.guardian.co.uk/business/marketforceslive/2011/jan/20/ftse-days-lows-wall-street
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