FTSE Close: Miners & banks fall; Randgold up

 

17.15 (close)

People walk past London's Stock Exchange

Taking stock: markets are expected to be spooked by news from Ireland and N Korea.

The FTSE 100 Index plunged by nearly 2% today as Irish bailout fears and Korean military tensions rattled investors' confidence.

The London market closed 99.5 points down at 5581.3 - its lowest level in more than a month - with banking and mining stocks leading the retreat.

The latest shock for markets came when it emerged North Korea had fired dozens of artillery rounds into rival South Korea's territory. South Korea later said it had returned fire.

The volatile climate sparked a move to safer investments such as the US dollar - which rose against most major currencies and led to a drop in commodity prices.

The pound was consequently down against the greenback at 1.58, but the political unrest in Ireland saw sterling up against the euro at 1.18.

Mining stocks featured heavily on the fallers board with Vedanta Resources down 101p to 2120p, Kazakhmys 49p lower at 1391p and Antofagasta off 58p at 1317p.

Meanwhile, investors said the Irish bailout, which is expected to amount to around £90bn, would do little to shield other heavily indebted countries from a potential collapse in investor confidence.

This kept banking stocks under pressure for much of the session, with Lloyds Banking Group 0.6p lower at 63.3p and Barclays down 5.8p to 264.2p, although Royal Bank of Scotland fought back to stand 0.2p higher at 40p.

On the results front, Severn Trent rose in the FTSE 100 Index after it announced plans for annual dividend growth of RPI inflation plus 3%.

The company is cutting the pay-out for this financial year due to the impact of Ofwat price controls, which contributed to a fall in half-year profits today. Shares in Severn Trent, which have risen around 25% this year, rose 9p to 1450p.

In the FTSE 250 Index, pubs group Mitchells & Butlers fell 3% despite a 26% rise in full-year profits and a surge in food sales at the start of its new financial year. Investors were disappointed by the company's failure to reinstate its dividend, leading to a fall in shares of 9.2p to 344.6p.

Bank note printer De La Rue was also lower, down 9% or 65.5p to 557.5p, after reporting a sharp fall in underlying half-year profits due to irregularities in paper production at a factory this year. It said the financial impact of the problems remained unclear.

Housebuilders also occupied the second tier fallers board after the British Bankers' Association said mortgage approvals for house purchase slumped to a 19-month low during October as buyers continued to stay away from the market.

Shares in Taylor Wimpey fell 1p to 24.2p and Barratt Developments declined 3.8p to 70.9p, while Persimmon eased 12.6p to 338.4p, a drop of 3%.

The biggest Footsie risers were Fresnillo up 21p at 1425p, Rolls-Royce ahead 8p at 598.5p, Randgold Resources up 65p at 6070p and Royal Bank of Scotland ahead 0.2p at 40p.

The biggest Footsie fallers were Man Group down 14p at 274.5p, Vedanta Resources off 101p at 2120p, Antofagasta down 58p at 1317p and Legal & General off 3.5p at 91.3p.

15.00 We have more on Severn's half-year results and new dividend policy. Severn's gains have been trimmed and the stock is now up 4p at 1,463p.

The Footsie is down 54.06 points at 5,626.77.

14.00:

An afternoon update - The FTSE 100 is 48.54 points lower at 5632.29.

Severn Trent rose after it announced plans for annual dividend growth of RPI inflation plus 3%. The company is cutting the pay-out for this financial year due to the impact of Ofwat price controls, which contributed to a fall in half-year profits today. Shares in Severn Trent, which have risen around 25% this year, rose 7p to 1466p.

Among the small caps, Sterling Energy fell 7.5p to 53.5p after the oil and gas explorer reported issues at its Kurdistan well operations which may require extra equipment to be mobilised.

Assura Group gained 2.75p to 44.75p after the healthcare firm more than doubled its first-half operating profit, reinstated dividend payments, and said it remained confident of its future growth prospects.

12.50

We have more on pub group Mitchells & Butlers, which has irked investors by delaying the return of its dividend. Its shares are down 11.8p at 342p.

The Footsie has fallen back 57.24 points to 5,623.59 in lunchtime trading.

11.40:

The FTSE 100 has steadied the ship for the most part and is 26.3 points lower at 5654.53.

10.25:

The FTSE 100 is struggling to make up for steep falls this morning after North Korean aggression added to Irish debt fears to push banks and miners lower.

The FTSE 100 Index fell to its lowest level in more than a month, dropping 1% or 57.7 points to 5,623.2, after tracking heavy losses in Asian markets as investors worried about other financially weak European countries.

By 10am the blue-chip index had recovered some of that ground to sit 32.92 points lower at 5647.91.

The session deteriorated when it emerged North Korea had fired dozens of artillery rounds into rival South Korea's territory.

Mining stocks were among those on the back foot, while banks again suffered losses on concerns about their exposure in Europe's debt crisis.

Biggest faller today was Vedanta Resources, 73p, or 3.3%, lower at 2,148p. However, gold specialist Randgold Resources was the highest riser, up 85p at 6,090p.

Royal Bank of Scotland fell 0.6p to 39.3p and Lloyds Banking Group dropped 1.6p to 62.3p, while Barclays was off 7.6p to 262.4p.

In currency, the euro was trading at $1.356 against the dollar, down from $1.379 overnight - although it held its level of 1.173 to the pound that it had reached at midnight, after giving up one cent during the course of yesterday.

On the results front, pubs group Mitchells & Butlers fell 4% despite a 26% rise in full-year profits and a surge in food sales at the start of its new financial year. Investors were disappointed at the company's failure to reinstate its dividend, leading to a fall in shares of 16.3p to 337.5p.

Bank note printer De La Rue was also lower, down 34p to 589p, after reporting a sharp fall in underlying half-year profits due to irregularities in paper production at a factory this year. It said the financial impact of the problems remained unclear. On Wall Street later, the Dow Jones is expected to fall.

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