FTSE 100 close: Kaz, Xstrata down, Vodafone up
The Footsie resisted the pull of profit-taking today, largely thanks to strong gains for the index's biggest single stock, Vodafone.
An upgrade for the telecoms giant meant the FTSE 100 index recovered morning losss to close 20.6 points ahead at 4,916.8.
'Having broken major resistance levels the markets are in a bit of no-man's land, with the next major resistance levels unlikely to be breached in the next week,' said Ian Horsley, indexes trader at Spreadex.
'The markets feel like they are due a pullback and clients that missed the rally are desperate for a significant drop to get onboard on the long side,' Horsley added.
Vodafone rose 3.1p to 134.15p after JP Morgan upgraded its strategy stance on the European telecoms sector to 'overweight', and advised investors to look at Vodafone particularly.
The broker said the telecoms sector is favoured by cheap valuations, increasing stable and predictable results and seasonal trading patterns that has led it to consistently outperform in the final months of most years since 1995.
The same broker's note also recommended reducing exposure to commodities stocks, which gave up some of Monday's gains. Xstrata and Kazakhmys were two of the top blue-chip fallers, closing 9.5p down at 861p and 35p to 945p respectively. Antofagasta was off 24.5p at 789.5p, and Eurasian Natural Resources 22.5p lower at 874p.
BHP Billiton, the world's biggest miner, lost 20.5p to 1,628p, after it said it will cut up to 70 jobs at its Mt Keith nickel mine in Australia to ensure the operation's viability.
Cairn Energy dropped 37p to 2,586p after the oil explorer said its large Indian oilfields would begin producing oil this week but warned in its half-yearly report that meeting targets for the next stages of the development was becoming 'increasingly challenging'.
The sale of Royal Bank of Scotland's retail and commercial assets in China has hit a stumbling block that could derail the talks with preferred bidder, Standard Chartered, the Financial Times reported.
RBS shares were 2p up at 53.75p and StanChart's were 32p off at 1,398p. Lloyds Banking Group was also lower after a recent strong run, down 0.14p to 107.82p.
Car insurer Admiral fell 2.6% or 28p to 1044p, despite chief executive Henry Engelhardt's description of the company's half-year results as 'outstanding'. Profits rose 5% to £105.3m – boosted by rising car insurance premiums - and the company signalled its expansion into the American market.
In the FTSE 250 index, Punch Taverns enjoyed a rare rally after the pub company reported a steadier trading performance at its tenanted estate. It forecast results in line with expectations, prompting shares to rally 23.3p to 130.9p, a gain of 21.6%.
It was followed by office space company Regus, which climbed 14.9% or 12.5p to 96p after the company increased its dividend, despite posting flat half-year profits.
Housebuilders rose on ongoing optimism over a turnaround in the UK property market, with the latest mortgage data showing a 17-month high for loan approvals last month. Taylor Wimpey lifted 2.75p to 53.2p, although Persimmon fell 7p to 511.5p despite news of more house stable prices.
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