Market report: Tuesday close

By Mickey Clark for MailOnline
Updated: 12:36 EDT, 11 April 2006

RECORD prices for gold, silver and copper on world markets saw mining shares on the march again today.

Five of them featured among the top 10 movers in blue-chips, BHP Billiton adding 13½p to 1155½p, Xstrata 31p to 2005p, Rio Tinto 14p to 3129p, Anglo American 20p to 2425p and Antofagasta 35p to 2364p. The last-named benefited from bullish comments by US broker Citigroup, which has begun coverage of the shares with a buy rating and 2600p 12-month target price.

Craig Sainsbury at Citigroup says the City does not appreciate the company's growth profile. The expanded reserve base at Esperanza in Chile increases the likelihood of a large project development, and Sainsbury calculates that 200,000 tons of copper production would be worth 70p a share now, rising to 500p in 2010. He also estimates that the group's Reko Diq project in Pakistan could be worth an extra 350p a share.

The strong performance by the miners was not enough to lift the rest of the market, however, and share prices generally gave back early gains to trade lower. The FTSE 100 index fell 50.5 to 6016.5in another day of thin trading ahead of the Easter break.

The Footsie's fall was also despite the warm reception given to the latest trading update from Marks & Spencer, which revealed an improvement in sales for the third quarter in a row. The price rose 22p to 586p. Broker Seymour Pierce has lifted its rating on the shares from hold to outperform following 'stunningly good' sales numbers. It has also increased its pre-tax profits forecast for this year from £730m to £752m. Rival broker Numis said the M&S performance was well ahead of expectations but repeated its hold rating and 575p target.

BT fell 5¼p to 213p as it was hit by the prospect of a price war engulfing the fast-growing broadband market where BT is one of the sector leaders. It follows the move by Carphone Warehouse, down 3½p at 310p, to offer free broadband to customers who sign up to its TalkTalk fixed-line telecom service. BT responded by saying it will increase the content of its service.

Oil shares were also on the move as the price of Brent crude hit a new high amid concern the US may launch a military strike against Iran. BP led the way among the majors with a rise of 1½p to 695p, while Royal Dutch Shell advanced 15p to 1985p. Among second-liners, Dana Petroleum added 33p to 1070p, Tullow Oil 2½p to 367¼p and Venture Production 19p to 735½p.

Computer services group Sage fell 1½p to 264½p after reassuring the City first-half profits would be in line with expectations. The consensus of brokers' forecasts for pre-tax profits is £111m.

Rolls-Royce fell 3¼p to 463¾p despite broker ABN Amro increasing its target price from 350p to 550p and repeating its buy rating. The broker said it expects demand for new civil aircraft to remain high for a number of years, a market in which Rolls-Royce is strong.

Lord of the Rings computer games supplier Games Workshop was squeezed a further 4p higher to 307p on talk that someone may be stalking the shares. The group, which warned in January that profits for the year would fail to match expectations, were changing hands at almost 900p less than 18 months ago.

Aim-listed Walker Greenbank posted a rise of 5¾p to 24p after returning to the black for the first time since 2000. The wallpaper, furnishings and textiles supplier weighed in with a pre-tax profit of £2.62m. But shareholders may have to wait a little longer for a payout.