Britain’s top share index dropped in weak volume on Thursday to post its b iggest daily fall in nearly three weeks as growth concerns and fading hopes for near-term U.S. monetary stimulus hit investor sentiment.

Minutes from the U.S. Federal Reserve’s June meeting, released overnight, suggested the central bank would be prepared to give stimulus through a third round of quantitative easing (QE) but the economic outlook would need to worsen first.

That hit key commodities like copper which in turn weighed on the heavyweight mining sector, among the biggest drags on the index, and fanned concerns about the sector outlook as the second-quarter earnings season kicks off.

Nervousness ahead of key second quarter growth data from major metals consumer China, due on Friday, also kept investors on edge.

Markets overreact both ways, and this time is on the downside. As Europe is stagnating, China is slowing and America is losing momentum, expectations going into the earnings season are very low, said Mike Lenhoff, chief strategist at Brewin Dolphin.

The FTSE 1000 closed down 56.23 points, or 1 percent, at 5,608.25, extending gains later in the session as U.S. stocks fell, on track for their sixth consecutive daily fall.

Technical charts also pointed to further weakness for the FTSE 100.

The recent development now points to at least an attempt to end the June correction (higher). If playing out as thought, the market will soon be challenging the 5,435 support and, if broken, new lows will be confirmed, said a technical strategist at SEB.

Trading volumes were again thin, at 67.5 percent of the 90-day daily average. With July nearly half-way through, activity on the benchmark index is at under 30 percent of the levels posted for June, according to Thomson Reuters data.

Volumes have been dreadful, and the Olympics are not going to help, said Ian Williams, a strategist at Peel Hunt. You can’t see much reason for investors to change their positions at the moment.

ASHMORE LEADS FALLERS

Funds house Ashmore Group was the biggest FTSE casualty, down 6.7 p ercent in volume more than four times its 90-day average after it reported the flight of about a fifth of the money it manages in equities during its fourth quarter, hit by euro zone worries and a flagging global economy.

Among miners, the biggest faller was Rio Tinto, down 3.5 percent and taking just over five points off the index. Rival BHP Billiton fell 3.3 percent, and miners claimed five of the top 10 spots on the FTSE fallers list.

Adding its weight to the gloomy sector outlook, Credit Suisse lowered its earnings per share (EPS) estimates for the sector.

With China growth and commodity demand structurally slowing the earnings outlook is muted, with on-going cost pressures and minimal top line growth; we forecast earnings down 20-30 percent year-on-year in 2012 and small growth in 2013, it said.

Earnings are likely to remain a strong focus for investors as the second quarter reporting season slowly kicks off.

Shares in Intercontinental Hotel Group dropped 2.3 percent after U.S.-listed rival Marriott reported a higher quarterly profit but said it was seeing weakness in some international markets.