Mining stocks, already under pressure amid fears of falling demand from China, were dealt a further blow today after China announced plans to raise the VAT on metal ores from January 1.

China is the world’s top consumer of copper and aluminium, and the tax would likely hit imports of metals as well as domestic production, and will further cut demand for metals from foreign miners.

Eurasian Natural Resources, which mines ferrochrome for use in stainless steel manufacture, fell 8 per cent, also driven down by a Credit Suisse downgrade on prediction of lower ferrochrome prices.

Kazakhmys, a copper miner, lost 6 per cent. Lonmin, miner of platinum lost 5 per cent and Vedanta Resources fell 5 per cent.

Oil stocks were also under pressure as the oil price fell again amid fears of a global recession, BG Group lost 2 per cent to 883.5p.

Man Group was driven down another 9 per cent to 223p as Citigroup downgraded, stoking further worries about whether it would have to sell down more assets to pay back debt.

Thomas Cook lost 6 per cent amid speculation its German parent Arcandor would have to sell down its 53 per cent stake to raise funds, given credence by Investec which downgraded from hold to sell.

Marks & Spencer dropped 4 per cent to 245p as it went ex-dividend. – Times Online