FTSE 100 close: Miners weigh Footsie down
The FTSE 100 index closed 3.5 points up at 4,386.9 after strong showings from banks and retailers were offset by falls among mining stocks.
High hopes: Traders will hope for a rally today.
On Wall Street, the Dow Jones started the day on the front foot, 30.7 points up at 8,705.9.
In London, Barclays shares pushed the Footsie higher after the bank evidently impressed investors by closing its final salary pension scheme - even if it didn't impress staff.
The bank closed the final-salary scheme, which faces a £2.2bn shortfall, to new members in 1997, but has now gone a step further by forcing existing workers to move to the scheme used by new staff.
Shares cheered 6.25p to 266p, and fellow banks followed its lead: RBS was 1.1p higher at 37.2p and Lloyds was 1.1p higher at 67.1p.
Insurers had some news to digest, after the mutual Royal London said it will not have to take a writedown on the £300m it is owed by Hugh Osmond's Pearl Group. Pearl is undergoing a debt restructuring that is expected to see banks take a £400m pound hit.
'If the market feels a little more relief, that will affect companies that were hit and de-rated at the time when the markets were really focusing on these bad assets,' said Mike Lenhoff, chief strategist at Brewin Dolphin Securities.
Aviva rose 12.25p to 346.75p, Legal & General was up 0.2p at 64.7p and Old Mutual was 1.7p up on on 73.5p.
Strong sales figures from supermarket Wm Morrison helped boost retailers today. The UK's fourth-largest supermarket group rose 6.5p to 254p, after revealing first-quarter sales growth of 8.2% excluding VAT.
Sainsbury's rose 5.5p to 322p and Tesco lifted 7.5p to 360.8p. The general retail cheer also boosted DIY group Kingfisher 4p to 196.6p and fashion chain Next 38p to 1,537p.
But heavyweight miners were the top fallers of the day and weighed heavily on the index. They were led by Rio Tinto, whose shares plunged amid speculation that its £12bn tie-up with China's Chinalco may have hit the rocks.
The failure of the deal would force the debt-laden the Anglo-Australian miner to embark on a £6bn money-raising rights issue.
Rio shares plunged more than 6%, or 192p, to 2,720p.
Other miners followed suit: Lonmin shed 100p to 1,410p, closely followed by Kazakhmys and Vedanta Resources, which lost 37p to 662p and 56p to 1,526p respectively. BHP Billiton stood 37p down at 1,456p.
Shares in Debenhams dipped 2.25p to 90p ahead of its planned £323m equity fundraising, which will probably be priced at a discount to this evening's closing price. But analysts say strong current trading and easing debt worries should support the stock.
Singer's Matthew McEachran expects to lift his full-year profit forecast by about £10m to £140m and says this, adjusted for new debt assumptions, could produce a fair value share price target of 110p to 120p.
'This is a very attractive proposition,' he says, keeping a 'buy' rating on the stock.
Altium analysts raise their share price target to 100p from 91p, but keep a 'hold' investment rating.
In the FTSE 250, shares in Synergy Health gained 13% or 55.25p to 470p after Brewin Dolphin responded to the health services firm's full-year results by lifting its rating on the stock to 'add' from 'hold', saying the company is 'progressively rebuilding credibility'.
The company reports a 4.8% rise in pretax profit to £26.1m, and says its order book has increased. Brewin Dolphin says while the results marginally undershot its projections, there are positives, including a recovery in profit margins.
The broker also says: 'We are encouraged that short-term international aspirations are on hold and the focus primarily on profit recovery and lowering debt.'
Brewin Dolphin lifts its price target for Synergy to 470p from 400p.
Insolvency firm Begbies Traynor fell 0.75p to 106.25p after it predicted increased workloads 'for several years to come'. The Manchester-based firm said insolvency work - which accounts for nearly 80% of group revenues - was 'very substantially ahead of last year'.
Tomorrow's agenda
Eric Daniels, the Lloyds Banking Group chief executive, is in for a tough day as he faces the bank's investors at its annual meeting. Shareholders will express their rage at Lloyd's deeply misguided acquisition of HBOS last year. The meeting will also be the last time investors can accept the bank's £4bn placing, which should prove popular as it is at a hefty discount to the current share price.
Fuller, Smith & Turner, the pubs operator, reports full-year results. Unlike most of its rivals, Fullers has largely shrugged off the recession. Panmure Gordon expects sales in its managed estate to be level with last year and down 2% in tenanted pubs. Carphone Warehouse also reports fullyear results and investors will want to hear further details of demerger plans. Analysts forecast pre-tax profits of £130m off sales of £1.4bn.
In the US, unemployment data - including non-farm pay-rolls - are released.
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