The London equities markets saw declines on the day on Tuesday as mining shares fell victim to fears that rising interest rates around the world could curb demand for metals. The FTSE 100 dropped 0.7 percent to 5,857.4 and the FTSE 250 declined by 0.9 percent to 9,458.3 on a volume of 3.3 billion shares traded on the day.

Lower prices on metals sent mining stocks down. Antofagasta fell 3.9 percent to £20.21. Xstrata was down 3.8 percent to £16.74, while Anglo American dropped 3.7 percent to £20.50 and BHP Billiton declined by 3.1 to 934½p. Copper miner Kazakhmys, based in Kazakhstan, fell 3.8 percent to 855½p on comments from its chief executive that the company might spend as much as $2 billion this year in diversification.

In the steel sector, Corus dropped 2.7 percent to 72¾p on the news that it will be placed in the FTSE 100 on Thursday.

In the retail sector, N Brown lost 0.8 percent to 212¼p when investors moved to take gains on the news that the company could be a bid target. Book and music retailer HMV Group dropped 4 percent to 182¼p amid rumors that private equity group Permira could abandon plans to purchase the company since its offer of 190p per share was turned down.

Tullow Oil saw a gain on the day of 2.4 percent to 310¾p on the news that its partner, Hardman Resources, had found oil in a well in Uganda, even thought there were few details of the find. The news gained Tullow an upgrade from “reduce” to “hold” from Oriel Resources. Oriel also upgraded Hardman, listed on Aim, from “buy” to “add”, sending Hardman up 3.8 percent on the day to 82½p.

Activity in the telecommunications sector helped send London equities markets higher on Monday. The FTSE 100 was up 0.6 percent to 5,897.8, the highest it has closed in nearly five years. Meanwhile, the FTSE 250 advanced by 0.8 percent to an all-time high close of 9,546.0.

Both Vodafone and BT Group were up on the news that AT&T has made a $67 billion bid for BellSouth. This move in the US highlighted mergers and acquisitions activity in the UK and spurred hopes of further activity.

Vodafone was up 2.9 percent to 125p on the proposed sale of its Japanese division, which has not been performing to expectations, to Tokyo-based SoftBank, and on speculation that Vodafone would also sell its 45 percent stake in US company Verizon Wireless, even though most analysts felt that the sale of the Verizon shares was unlikely. BT Group added 5.1 percent to 231¾p.

Elsewhere in the sector, Colt Telecom was up 6.9 percent to 69¾p, Cable and Wireless gained 0.5 percent to 108p on rumors that it was being targeted by Thus Group, which was even at 15½p.

In the tobacco sector, BAT gained 2.5 percent to £14.43 on an upgrade from Citigroup.

In the retail sector, Matalin gained 3.8 percent to 198p on a report that its founder and chairman was talking to private equity buyers about selling his majority stake in the company. MFI Furniture was up 4.1 percent to 94¼p, also on interest from private equity groups. Home shopper N Brown gained 8.4 percent on the day to 214p.