Shares in Anglo American, the miner of metals, diamonds and coal, lost more than 8 per cent amid fears that Cynthia Carroll, its chief executive, will have to announce a dividend cut with its final results next month.

Daniel Fairclough, a Merrill Lynch analyst, cut his rating from “buy” to “underperform” and slashed his price target from £20.50 to £13, triggering a 133p slide in Anglo’s price to £14.90. The shares have now fallen by a fifth in three days.

Mr Fairclough said that if mineral prices recovered as he predicted, Anglo’s cashflow would be zero for the year, meaning that it would have to borrow money to match last year’s $1.5 billion dividend payout. He gave a warning that in the unlikely event that current spot prices held steady, it would haemorrhage $500 million of cash in the year and might have to launch a rights issue.

Analysts at Nomura also cautioned that Anglo Platinum, Anglo’s subsidiary, had not cut enough production to counter falling demand for platinum, which is used in car exhaust catalysts.

All miners were suffering, with Xstrata down 58½p to 822p, also hit by a Merrill Lynch downgrade, and Rio Tinto falling 58½p to 822p. That helped to send the FTSE 100 down 56.83 points to 4,448.54.

BSkyB fell 25p to 450p after Goldman Sachs said that it would be vulnerable to the first recession that pay-TV in Britain has experienced, with customers potentially cancelling their subscriptions. Goldman downgraded Sky, ITV, down 1¾p at 38p, and Pearson, down 7p at 605p. However, Goldman said that WPP, up 5¼p to 406¾p, and Informa, down 1½p at 262p, were conviction buys. It also upgraded Yell to “buy”, and the Yellow Pages publisher rose 5¾p to 53¾p.

HBOS was up 5.8p at 79.8p, Royal Bank of Scotland rose 2.5p to 53.1p and Lloyds TSB gained 3.1p to 131.5p after Gordon Brown said that he would be meeting the banks in the next few days to talk about further action to encourage lending, rumoured to include the creation of a “bad bank” for toxic debt.

Carphone Warehouse rose 1½p to 110¼p, bolstered by rumours of a sale of its TalkTalk landline business and despite a devastating downgrade by Dan Gardiner, of Teathers, who set an 80p target and forecast another fall in profitability in its third-quarter figures next week. He said that the business model of its Best Buy Europe retail venture looked broken since the shops’ consumption of cash doubled in the first half while gross profit per mobile subscriber fell by up to 20 per cent.

Punch Taverns outperformed a rising pub sector, climbing 5p to 76¼p, aided by talk that its trading statement next week would show that Christmas trading for pubs had not been as bad as feared, with cashflow boosted by late December rent collection from tenants. However, Mark Brumby, of Blue Oar, said that January trading in the pub sector could be “ghastly”.

CSR, the maker of Bluetooth chips, fell 4½p to 195½p after Broadcom unveiled a rival ultra-fast technology at a trade show which RBS analysts said would further undermine CSR’s sales.

— New York: Shares on Wall Street fell as data indicated that the labour market had worsened last month, heightening fears about the outlook for profits and a worsening recession. The Dow Jones industrial average closed at 8,599.18 points, down 143.28.

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