FTSE falls as China devaluation hits Burberry, mining stocks

The FTSE 100 fell on Tuesday, led by stock mining companies and luxury firm Burberry, after China devalued its currency, raising the costs of imports. The world's second-largest economy devalued the yuan on Tuesday after a run of poor economic data, guiding the currency to its lowest point in almost three years in a move that economists said was aimed at helping its exporters. Mining groups BHP Billiton, Glencore, Antofagasta and Rio Tinto were down between 2.3 and 4.7 percent. Copper fell 3.2 percent after the move by China, which is the world's biggest consumer of metals. The mining sector was down 2.6 percent, moving back towards a six-year low hit in late July. The exception was precious metal miners, with Randgold and Fresnillo up 2.1 percent and 2.6 percent respectively, as gold hit a three-week high. Burberry, which sells extensively in China, fell 3.4 percent. "A weaker yuan makes imports more expensive, and with China accounting for some 14 percent of the company's sales, the implication is clear," Trustnet Direct analyst Tony Cross said. Britain's FTSE 100 was down 0.9 percent at 6,679.22 points by 1332 GMT. Weakness in commodity stocks has contributed to recent falls in the index, which is now more than 6 percent off April's record high. On the upside, Prudential reversed an early fall to climb 3.7 percent after posting a forecast-beating, 17 percent rise in first-half operating profit. "All of the key financial metrics were ahead of both our and the market's expectations, highlighting the strength of Pru's positioning across the main financial markets in the U.S., UK and Asia," Shore Capital analysts said in a note. Among mid caps, bookmaker Ladbrokes fell 1.3 percent on news of a 44-percent drop in adjusted first-half profit to 24.7 million pounds, reflecting less betting on football and a string of customer-friendly results. Its update was in-line with guidance.