LONDON MARKETS: FTSE 100 Slumps For Third Day As Miners Slump

By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- The U.K.'s FTSE 100 index kicked off August on a downbeat note and headed for the lowest close since April on Friday, as investors continued to move out of risky assets against a background of geopolitical concerns and rate-hike fears in the U.S.

The benchmark index slumped 1.5% to 6,628.82, on track for a third straight day in the red.

Risk-sensitive sectors, such as banks and miners, posted the biggest losses as investors remained wary of the fallout from tougher sanctions on Russia, Argentina's selective default and a broader risk-off sentiment triggered on Thursday. U.S. stocks contributed to the downbeat mood after the Dow Jones Industrial Average (DJI) skidded more than 300 points on Thursday, partly due to speculation that solid economic growth figures could trigger a rate hike.

In London, mining firms declined on Friday, ignoring better-than-expected manufacturing data from China. Shares of Glencore PLC dropped 2.8%, Rio Tinto PLC (RIO) lost 2.7%, and BHP Billiton PLC (BHP) fell 2.4%.

Capita PLC gave up 3.2% after Credit Suisse cut the business-services company to neutral from outperform.

On a more upbeat note, shares of International Consolidated Airlines Group SA rose 1.2% after the airline and British Airways parent reported a jump in second-quarter profit.

In data news, the U.K.'s manufacturing purchasing managers' index showed the sector slowed more than expected in July and expanded at the slowest pace in a year.

Rob Wood, chief U.K. economist at Berenberg, said in a note that the weakness in July was "probably in response to escalating Ukrainian tensions and mediocre euro-zone growth."

He also noted that this was the lowest reading since U.K. growth surged last summer, which "raises questions about whether the recent rapid pace of expansion can be sustained in the second half of the year."

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