UK shares fell sending the FTSE down 19.60 points to close at 6,026.20, led by falls across the mining sector.
Kazakhmys led the rout, shedding more than 5%, or 68.5p to 1,200.5p as investors offloaded cash-generating stocks.
Xstrata fell 93p to 1,935p, Rio Tinto dropped 89p to 3,063p, and Antofagasta fell 64p to 2,252p.
BHP Billiton fell 29p to 1,114p, and Anglo American fell 56p to 2,337p.
The reason is being pinned on movements in the US market for corporate and government debt, where yields soared in response to US government data suggesting much faster than expected employment growth over the past month.
That data suggests further pressure on the Federal Reserve to raise interest rates, dampening demand for US Treasuries. As the yields have increased, this has hit stocks trading on dividend yields, which many investors hold for income.
Mining stocks are also sensitive to moves in the dollar exchange rate, because they price their commodities in dollars, and rising US interest rates would push up the price of the US currency on the market, making their output more expensive to buy.
Banks also fell, with HBOS down 19.5p to 939.5p, and Northern Rock down 23p to 1,117p.
However, Barclays led the gainers, up 15p to 701p after this morning announcing it would open new branches in Italy and Portugal.
BP gained 9p to 681.5p, while BAE added 4.5p to 435.5p on news it is to sell its stake in commercial aeroplane maker Airbus.
Shares are down in the US currently, with the Dow Jones Industrial Average index off by about 83 points to 11,132.
Hewlett Packard has dipped $0.70 to $33.40 after complaints about one of its notebook PC products.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Jonathan Boyd on 020 7484 9769 or email [email protected].IFAonline
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