The London market’s drift towards two-month lows caught up with Legal & General on Tuesday, which led the blue-chip fallers.

Mining bounce lifts Fresnillo

A rally among mining stocks helped Fresnillo recover from a seven-week low, with the stock gaining 1.9 per cent to 532p.

The group this week dropped plans to buy out MAG Silver, its partner at one of the world’s biggest silver deposits. Fresnillo owns 56 per cent of the project but needs approval from 60 per cent of shareholders to develop the site, leading to a possible stand-off with MAG Silver.

The insurer’s shares, which have doubled since early March, lost 7.9 per cent to 55.8p after Société Générale said the rally had left it looking expensive versus peers. The broker moved to a “sell” rating and slashed its 2009 profit estimate by 80 per cent.