FTSE close: ENRC & Kazakhmys lead gains

By Ed Monk for Thisismoney.co.uk
Updated: 12:54 EDT, 13 June 2011

17.20 (close)

Blue Monday: Shares may fall today.

London's leading share index closed modestly higher as afternoon gains following a strong start on Wall Street had all but petered out by the close.

The FTSE 100 Index was up 7.7 points at 5773.5 after a rally in banking shares helped counter ongoing worries over the eurozone debt crisis.

At one stage it was up 26 points after a strong opening on the US market, which was led higher after a flurry of corporate deals, including news that Timberland had agreed to a $2bn (£1.23bn) takeover by rival outdoor clothing group VF Corporation.

But it followed the US market back down again as investors continued to fret about the state of the American economy.

The pound rose against the euro at 1.13 as EU politicians continue to argue about how best to deal with the eurozone debt situation, while sterling was 1.63 against the US dollar.

Sentiment in London was helped by a report that Lloyds Banking Group intends to cut £1bn, and 15,000 jobs, from its cost base, helping its shares rise by 0.6p, or 1%, to 47.6p.

Another bank gainer was Barclays, after it agreed to settle all complaints over payment protection insurance without quibble as long as they had been submitted by 20 April.

The bank has set aside £1bn for possible compensation payouts, a figure that was not changed after today's announcement, which helped the shares add 3.9p to 260.4p.

Other risers included the two Kazakhstan-based miners, Eurasian Natural Resources (ENRC) and Kazakhmys after weekend reports that Glencore is considering an offer for ENRC.

Analysts suggest ENRC would be a good fit for the recently floated Glencore. Shares in ENRC rose by 34.5p, or 5% to 776.5p, while Kazakhmys was up 26p to 1235p.

An upgrade and positive comment by broker Investec helped pump maker and engineer Weir add 2p to 2031p.

Imperial Tobacco was among the fallers after a warning that profits are suffering in Spain and it is slashing prices to retain its market position. That sent the Lambert & Butler maker's shares down 29p at 2056p.

The heaviest faller was mobile power generators group Aggreko after APR, the number two company in the sector, agreed a takeover by Horizon, the cash shell run by former Pizza Express and Pearl Insurance backer Hugh Osmond.

Amid fears the deal could result in stiffer competition, Aggreko shares were more than 3% lower, off 61p at 1874p.

P&O and Princess Cruises group Carnival also went into reverse, dropping 45p to 2254p, on a warning it had underestimated the full impact on demand of conflicts in the Middle East and North Africa and earthquake and subsequent nuclear crisis in Japan.

On the AIM market, Majestic Wine unveiled strong results and plans to double its size over the next 10 years, but this failed to impress investors. Shares dropped 20.3p to 450p.

The biggest FTSE 100 risers were ENRC up 34.5p to 776.5p, Glencore ahead 14p at 523.4p, Kazakhmys up 26p at 1235p and Barclays ahead 3.9p at 260.3p.

The biggest fallers were Aggreko down 61p at 1874p, Antofagasta off 27p at 1,215p, Carnival down 45p at 2254p and Imperial Tobacco off 29p at 2056p.

15.30: The Dow Jones has opened higher - rising 56.6 points to 12,008.52 after an hour of trading on Wall Street.

Back in London, the FTSE 100 is 23.03 points up at 5788.83.

13.00:

At lunchtime, the FTSE 100 is 18.4 points higher at 5784.23, in thin trading.

A report that the cost-cutting programme to be unveiled by chief executive Antonio Horta-Osorio at the end of June could take £1bn, and 15,000 jobs, out of Lloyds Banking Group's cost base lifted its shares by 0.7p to 47.7p.

Another bank gainer was Barclays, after it agreed to settle all complaints over payment protection insurance without quibble as long as they had been submitted by 20 April.

The bank has set aside £1 billion for possible compensation payouts, a figure that was not changed after today's announcement, which helped the shares add 2.8p to 259.3p.

An upgrade and positive comment by broker Investec failed to benefit the share price of pump maker and engineer Weir, which dropped 5p to 2024p.

Another faller was mobile power generators group Aggreko after APR, the number two company in the sector, agreed a takeover by Horizon, the cash shell run by former Pizza Express and Pearl Insurance owner Hugh Osmond.

Amid fears the deal could result in stiffer competition, Aggreko shares were nearly 4% lower, off 755p at 1860p.

Strong results and plans to double in size over the next 10 years failed to impress investors in AIM-listed wine seller Majestic Wine.

The company, which has 165 stores across the UK, said it wanted to expand to at least 330 stores at a rate of 12 a year, after it saw like-for-like sales growth of 5.3% in the last financial year.

Analysts said while the figures were good, they expected more of a boost from the recent good weather.

11.05:

The FTSE is struggling to hang onto gains but is still 1.8 points higher at 5776.6.

In currency, the pound is at $1.6259 compared to $1.6233 at the previous close. The euro is at €1.1341 compared to €1.1303 at the previous close.

09.40:

The FTSE 100 rose today with the Kazakhstan-based mining giants up on bid talk, while Imperial Tobacco suffered on news of flagging Spanish sales.

London's blue chips shrugged off losses across Asia overnight and Wall Street's poor finish to last week.

The top flight was up 18.1 points at 5783.9, even though Asian stock markets retreated on worries that the global economic recovery is stalling, fears that also sent the US Dow Jones Industrial Index down by 1.4% on Friday.

The index was lifted by a strong performance by the two Kazakhstan-based miners, Eurasian Natural Resources (ENRC) and Kazakhmys after weekend reports that Glencore is considering an offer for ENRC.

Analysts suggest ENRC would be a good fit for the recently floated Glencore, but some doubt any deal will happen soon because of the proximity to the recent listing. Shares in ENRC rose by 32.75p, or 4% to 774.75p, while Kazakhmys was up 43.5p to 1252.5p.

A warning that profits are suffering in Spain and it is slashing prices to retain its market position sent Lambert & Butler group Imperial Tobacco lower, with the shares down 1% at 2064.5p.

Another faller was mobile power generators group Aggreko after APR, the number two company in the sector, agreed a takeover by Horizon, the cash shell run by former Pizza Express owner Hugh Osmond.

Amid fears the deal could result in stiffer competition, Aggreko shares were nearly 4% lower, off 66.5p at 1868.5p.