Fears that the global resource boom was over left the miners unable to join a bounceback in badly battered London shares.

Ferrexpo, the Ukrainian iron ore miner that floated 15 months ago, was one of the worst hit, dropping below its 140p flotation price for the first time, down 24½p to 132½p.

Analysts are growing increasingly worried about whether it can find a joint venture partner to fund its two undeveloped mines while costs soar at its only active mine.

Kostyantin Zhevago, the Ukrainian oligarch who founded Ferrexpo, recently sold some of his stake and Deutsche Bank downgraded the company from “buy” to “hold” yesterday, saying that there would be other broker downgrades, possible government intervention and weaker Chinese demand. Deutsche advised investors to seek lower-margin producers with strong balance sheets.

ArcelorMittal, the steelmaker, said yesterday that it was cutting production at its plant in Kazakhstan, which supplies Russia and China, by up to 30 per cent this year – a sure sign of lower demand for cars and infrastructure.

Iron ore and coal are the key raw materials for steelmaking, hence UK Coal fell 26¼p to 315¼p. The sector was also hurt by the strengthening dollar. Xstrata, the miner, down 33p to £16.83, dropped its £33-a-share bid for Lonmin, the platinum miner, which plunged 461p to £18.13. Xstrata then raised its stake in Lonmin to 25 per cent, implying that it would consider bidding again at a lower price in six months. Glencore, Xstrata’s key shareholder, is a metals trader and may have determined that the price of platinum, which is used in catalytic converters for cars, had passed its best.

Copper hit a 19-month low on figures showing weak industrial demand from the US. However, Rio Tinto bucked the trend and rose 16p to £34.87 amid talk that AreclorMittal would build a stake now that the Australian Government had approved BHP Billiton’s planned takeover. BHP was off 50p at £12.09.

The bank sector drove the FTSE 100 up 57.14 points to 4,959.59 as the Government suggested that it might raise the level of savers’ guaranteed bank deposits and on renewed hope that the US bailout plan would be approved. Standard Life, up 17p at 257p, said that it would support the Lloyds TSB rescue of HBOS. Lloyds jumped 23½p to 250p and HBOS climbed 25.7p to 148.1p, narrowing the discount to the Lloyds offer.

Royal Bank of Scotland underperformed, up a penny to 180p, amid fears that the Dutch regulator would hold it liable for any collapse in the value of ABN Amro, which it bought last year with Fortis and Santander.

Cadbury slid 8½p to 557p as Ken Hanna, its well-regarded finance director, announced his resignation. UBS gave warning that Cadbury “has a bond that matures in June 2009 and will probably need to put some refinancing in place before then”. UBS noted that it was cautious on all food producers that had yet to feel the impact of consumers trading down.

— New York: Stock prices fluctuated and credit markets remained tight as uneasy Wall Street traders awaited the Senate’s vote on the proposed bailout of the financial sector. The Dow Jones industrial average closed at 10,831.10 points, down 19.60.

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