Royal Mail closed down by 8.4% after it issued a warning that rival companies were eating into profits from the Parcel delivery business. Pre-tax profits fell to £218m for the six months leading up to the end of September, down from £233m for the same period in 2013. This news made Royal Mail the poorest performer of the day.
Mining shares were also hit hard, with Rio Tinto losing 2.1% and BHP Billiton seeing a similar fall as investors became concerned that the recent fall in iron ore prices was not an anomaly. There are concerns that ore prices could continue to fall into next year. The recent slowdown in the Chinese economy is cause for concern for miners because China is the biggest consumer of basic materials, and falling demand from them could seriously hamper the profits of miners as a whole.
Another sector that saw heavy losses was pub groups. Investors were concerned by the news that MPs had voted to give pub tenants greater freedom from bigger pub companies. This news caused Enterprise Inns to lose 16.7% while Punch Taverns lost 16.8%. A spokesman for Enterprise Inns was critical of the change and said that the reform could have serious unintended consequences for the pub industry and for publicans in general.