Monday Morning Market Update: Shares weaker as manufacturing shrinks and mortgage approvals fall

Share prices extend earlier falls as British manufacturing shrank at a record pace in November after a collapse in new orders.

Data from the Markit/CIPS survey this morning showed that the headline purchasing managers' index plunged to 34.4 from October's downwardly revised 40.7p, both the lowest and biggest one-month fall in the series which started 16 years ago.

UK mortgage approvals for house purchase fell in October to match August's reading of 32,000, the lowest since the series began 10 years ago, according to Bank of England figures.

By 10am the FTSE 100 index was trailing almost 77 points easier at 4,211 and the Mid-250 index was down 150 points at 5,944.

Mining shares recorded the worst casualties as fears of a prolonged recession prompted fresh falls in metal prices.

Lonmin at 767p, Fresnillo 141p, Kazakhmys 238p, Anglo American £14.16 and Eurasian Natural Resources 259p were the top five fallers with losses of 13p to 117p.

Other prominent weak spots were Wolseley at 283p, Next £10.32, London Stock Exchange 575p, Kingfisher 114p and National Grid 646p, between 5.6p and 33p weaker.

Top riser was HBOS at 93p, up 1.70p as the mortgage lender shrugged aside another attempt to scupper its merger with Lloyds TSB.

William Morrison was also supported at 243.5p, up a penny, ahead of Thursday's figures, but Tesco dipped 2.4p to 292.8p amid fears of gloomy profits news tomorrow.

Among the Mid-250 stocks Colt Telecom stood out at 652.75p, up 3.5p, on revived takeover speculation and talks of US bid interest lifted Sci Entertainment 2.5p to 21p.

Victrex remained friendless after a profits alert, falling 150p to 360p and the Merril Lynch rating downgrade continued to weigh on Intertek, 102p lower at 653p.

Morgan Stanley's cautious review of the hotels and pubs sectors prompted fresh falls in such as JD Wetherspoon at 270p, down 30p.

Positive trading updates sustained Claimar Care at 10.25p, up a penny and St Ives, 7.25p better at 77.25p.

New Star Asset Management dropped 9.49p, or 68%, having been refused a share suspension request pending the outcome of talks with its banking syndicate.