FTSE 100 close: Miners down, defensive stocks gain

By Ed Monk for Thisismoney.co.uk
Updated: 12:07 EDT, 14 September 2009

The FTSE briefly fell back from the 5,000 mark today as shares were led lower by miners and chemical giants.

Market watcher: Share to retreat after gains last week.

The blue chip index spent most of the day beneath the 5,000 mark but it clawed back up to close at 5,000.12 - down 11.4 points.

Miners were among the heaviest fallers after metal prices slowed and oil lost more than 1% during the morning, to $68 a barrel, following a rebound in the dollar and renewed concerns that oil prices may have risen too quickly.

All this meant that Kazakhmys, down 9p to 1,087p, Vedanta Resources, 37p lower at 1,895p, and Eurasian Natural Resources, down 26.5p to 843.5p, all suffered.

Richard Hunter, head of equities at Hargreaves Lansdown, said: 'There's weakness in metal prices and oils and miners are down. Certainly there are some jitters and investors are going back to safe havens.'

The leading Footsie faller was catalytic convertors firm Johnson Matthey, which slid 1.45% or 21p to 1,426p after a broker downgrade from Morgan Stanley.

Morgan helped retailer Marks & Spencer in the other direction, up 3.5p to 373.5p, after it lifted forecasts and raised its target price.

Energy supplier Scottish & Southern Energy was the beneficiary of more broker activity, gaining 6p at 1,159p after HSBC started the firm at 'overweight', making encouraging noises about dividend growth and the stability of the group's finances.

The small group of FTSE 100 risers included Cadbury, 10.5p higher to 786p, which rejected an approach from US food giant Kraft over the weekend. A letter from Cadbury Chief Executive Roger Carr to Kraft chairman and CEO Irene Rosenfeld said that the Kraft takeover proposal fundamentally fails to reflect its current value.

Other defensive stocks Unilever, 24p higher at 1,645p, GlaxoSmithKline, 7.5p better off to 1189.5p, and Imperial Tobacco, 6p higher at 1,770p, were also in positive territory, as investors looked to shelter in relatively recession-proof equities.

Tomorrow's agenda

Debenhams is expected to announce that it is teaming up with British designer Henry Holland when the department store chain updates the market on trading. the group is hoping Holland, best known for his provocative slogan t-shirts will drag in young shoppers to its stores. Analysts forecast pre-tax profits will come in at around £121m for the year to the end of August, with a dip in like-for-like sales.

Regulators are expected to say that the rules governing Coronation Street broadcaster itV's advertising sales are to be relaxed. The Competition watchdog introduced the contract rights renewal system six years ago, when Carlton and granada merged, to stop ITV abusing its leading position in the ad market.

More signs of a pick-up in housing are expected when the royal institute of Chartered Surveyors publishes its August survey. Howard Archer of IHS Global Insight reckons buyer enquiries will be up for the 10th month in a row.