FTSE close: Miners rise; BP, retail suffer

By This Is Money
Updated: 12:19 EDT, 16 May 2011

17.10 (close)

The FTSE 100 Index failed to make headway today after fears over the eurozone debt crisis offset gains from resurgent miners.

The market slumped 1% in early trading after being dogged by concerns that the arrest of IMF chief Dominique Strauss-Kahn on sex assault charges threatened to weaken the organisation's ability to resolve the Greek debt crisis.

But the top flight index pulled back earlier losses to finish down 2.2 points at 5923.7 after mining stocks rebounded amid more volatility in the commodities market.

The US market lifted the blue chip index upwards after it made gains despite the headline reading in the Federal Reserve Bank of New York's Empire State Manufacturing Survey coming in well below expectations.

The pound was up to 1.62 against the dollar as the weak US manufacturing data caused the greenback to fall. But sterling was down at 1.14 against the euro after the highest eurozone inflation for 30 months raised the prospect of another interest rate hike by the European Central Bank.

Miners dominated the risers board after investors were urged to take advantage of a recent sell-off in the sector.

Antofagasta was the top riser, up 43p to 1185p, after an upgrade from Citigroup. Kazakhmys was up 29p at 1242p and BHP Billiton was ahead 52p at 2392p.

Software group Autonomy was also near the top of a shortened risers board after the company said it had agreed to buy assets from American information management firm Iron Mountain for 380m US dollars (£234m).

Autonomy will acquire digital archiving and online backup and recovery solutions from Iron Mountain Digital under the deal. Shares were up 46p at 1780p.

But the retail sector came under the spotlight following speculation that under-pressure Kesa Electricals was considering a move to sell its UK arm Comet and delist from the London Stock Exchange.

Kesa shares were 9.7p higher at 150.7p, while rival Dixons Retail, which owns PC World and Currys, added 2.3p to 18.4p on hopes it will see some benefit from reduced competition.

Elsewhere, shares in BP fell nearly 1% as the deadline for its Arctic exploration and share swap deal with Russian government-owned Rosneft closed in.

BP has until midnight to secure an agreement with Rosneft and its existing Russian partners in a 50/50 joint venture TNK-BP. Shares were 3.8p lower at 438.5p.

Outside the top flight, shares in London Stock Exchange Group were also higher after it emerged that a group of Canadian pension funds and banks had tabled a rival bid proposal for TMX Group, the owner of the Toronto stock exchange.

LSE, which unveiled a £4bn merger with TMX in February, rose 56.5p to 884p amid speculation the rival deal could make it susceptible to takeover.

The biggest Footsie risers were Antofagasta up 43p to 1185p, Autonomy ahead 46p at 1780p, Kazakhmys up 29p at 1242p, and BHP Billiton ahead 52p at 2392p.

The biggest Footsie fallers were Aggreko down 61p to 1750p, Intertek off 47p at 2008p, Invensys down 7.2p at 319.4p, and Weir Group off 42p at 1878p.

15.35: Losses have narrowed but the FTSE 100 is still trading 21.3 points into the red at 5,904.6 as the end of today's session approaches.

The Dow has also recovered to some extent despite the weaker than expected manufacturing data reported earlier. It's down 12.3 points at 12,583.4.

14.45:

The Dow Jones has opened 38.8 points lower at 12,557.

US investors are jittery about the debt discussions ongoing in Europe, and a key manufacturing survey showing weaker than expected activity this month didn't help improve their mood.

The FTSE 100 is down 42.5 points at 5,883.4.

We have more on Autonomy's well-received acquisition of the digital assets of information management firm Iron Mountain for £234m.

The acquisition is expected to enhance Autonomy's 'cloud platform', which hosts software services on behalf of client companies and relays them to customers on demand. Its shares are up 78p at 1,812p.

13.00:

London stocks are still ailing as uncertainty hangs over the outcome of European discussions about Portugal and Greece debts, which are being held in the absence of IMF chief Dominique Strauss-Kahn.

The FTSE 100 index is 52.9 points lower at 5,873. Germany's Dax is down 40.6 points at 7,403.3 while France's CAC 40 is 52.7 points off at 3,966.2.

Software group Autonomy remains at the top of a shortened risers board after its digital asset acquisition for £234m. The shares are up 71p at 1805p.

BP's stock fell as the deadline neared for its Arctic exploration and share swap deal with Russian government-owned Rosneft. It has until midnight to secure an agreement with Rosneft and its existing Russian partners in the 50/50 joint venture TNK-BP.

Latest reports suggest BP is in last-ditch talks to buy out shareholders in TNK-BP for around £18.5bn but there was no guarantee the parties would reach an accord. Its shares are 3p lower at 439.2p.

Away from the stock markets, private equity-owned Alliance Boots has withstood the dismal retail climate to deliver higher annual profits and revenues, and managed to pay down some of its debt.

The High Street pharmacy giant posted a 14% rise in underlying profit to £1.05bn, while sales were up 15% at £20.2bn in the year to March 31. Read more here.

11.25:

The Footsie has sunk deeper into the red - it's down 51.6 points at 5,874.3.

Ben Critchley, sales trader at spreadbetter IG Index, said: 'Renewed concerns over both the pace of global economic growth and eurozone sovereign debt issues has resulted in European markets starting the week very much on the back foot.

'It seems that there's no real momentum in the market and the worry now is that a waiting game sets in with risk aversion dominating, and more money coming off the table.'

Gold was fixed this morning at $1,495 an ounce compared with $1,505.75 at the previous close. Brent crude is trading at just under $111 a barrel.

In currency, the pound at 10am was $1.6201 compared to $1.6178 at the previous close. Against the euro, the pound was at €1.1464 compared to €1.1429 at the previous close.

Looking ahead to the US open, futures trading unsurprisingly points to a fall on the Dow Jones as European debt worries weigh on investor sentiment across the Atlantic too.

10.10:

The FTSE 100 is under the cosh as talks to resolve the eurozone debt crisis are thrown into disarray, hitting bank stocks and offsetting gains among the miners.

The blue chip index is down 15.9 points at 5,910 after bailout talks were overshadowed by the arrest in New York of IMF chief Dominique Strauss-Kahn on sex assault allegations.

Mr Strauss-Kahn had been due in Brussels to oversee the Portuguese deal and to discuss with the EU the growing economic crisis in Greece, which may mean revising the rescue package already granted to Athens.

'The Strauss-Khan development shouldn't fundamentally effect the outcome of the meeting but it does cast a shadow over the proceedings,' Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers, told Reuters.

The euro fell to a two-month low against the dollar, while France's CAC 40 stock market dropped 1% and Germany's Dax slipped 0.5%.

Royal Bank of Scotland is 0.86p lower at 41.9p, while Lloyds Banking Group is off 0.74p at 53.96p and Barclays is down 3.05p at 271.25p.

Meanwhile, miners' fortunes were on the up as investors went bargain-hunting following the recent sector sell-off.

Silver miner Fresnillo rose 3p to 1,327.00p, Rio Tinto was up 38.5p at 4,131.5p and Xstrata gained 12.5p to trade at 1,370.5p.

But software specialist Autonomy topped the risers' board, 117p higher at 1,851p, after it announced the acquisition of digital assets from Iron Mountain for $380m in cash.

Goldman Sachs analysts said the deal would further consolidate Autonomy's leadership in the archiving/e-discovery market and help it in the cloud computing market.

Attention was also focused on the retail sector after press reports said under-pressure Kesa Electricals was considering a move to sell its UK arm Comet and delist from the London Stock Exchange.

Kesa shares were 7.55p higher at 148.55p, while rival Dixons Retail added 0.9p to 17p on hopes it will see some benefit from reduced competition.

Shares in London Stock Exchange were also higher after it emerged that a group of Canadian pension funds and banks had tabled a rival bid proposal for TMX Group, the owner of the Toronto stock exchange.

LSE, which unveiled a £4bn merger with TMX in February, rose 2% or 19p to 846.5p.