London close: Miners sink Footsie
Weaker metal prices and broker downgrades slammed the mining sector Monday, condemning London's leading index to a dreary session despite a brighter start in the US.
Rio Tinto led the mining sector lower as HSBC cut the shares to "neutral" from "overweight" as it reckons BHP Billiton is unlikely to table an offer that would be dilutive to EPS in 2009 and beyond.
Meanwhile, a downgrade to "neutral" from "buy" sent Lonmin south, with UBS lowering both 2007 and 2008 earning estimates, although the target goes up to 4,000p from 3,400p.
Copper miner Antofagasta dropped as copper and aluminium prices declined, with Anglo American, Vedanta Resources, Kazakhmys and Xstrata following its lead.
Among the risers, FT owner Pearson was among the leaders after an upgrade from UBS. The new price target is 1,050p, up from 875p, while eth Swiss broker's stance has moved from "neutral" to "buy".
Pearson shares started to move ahead at the end of last week when rival Thomson agreed the sale of its North American education businesses for a decent price. Pearson also has substantial education assets in the US.
Hanson jumped on talk of private equity interest, while Wm Morrison also rose on talk that private equity group CVC is interested.
A weekend report suggested that the private equity firm is in discussions with its adviser, Goldman Sachs, about an offer for the supermarket group, though CVC played down the talk. Morrison has been tipped as a target because of its extensive property portfolio.
Centrica was in favour on expectations that it will beat operating profit forecasts this year if wholesale energy prices match current forward market prices.
It also said British Gas has lured back 0.9m customers since it announced its first round of energy price cuts at the beginning of February. It didn't say how many had left during the period.
Compass, the world's largest caterer, is to double its share buy-back to £1bn, after agreeing to sell its European vending business, Selecta, for £772.5m. The German private equity house Allianz Capital Partners is to buy the business.
Magner's cider owner C&C is to sell its soft drinks division and related assets to Britvic for €249.2m. The group's soft drinks division includes Club soft drinks and Ballygowan bottled water.
Dairy group Robert Wiseman's turnover increased by 6.5% to £605.3m in the year to March. Operating profits rose by 30% to £35.7m with pre-tax profit up by 29.4% to £34.6m.
Informa is to buy online data group Datamonitor for £502m or 650p per share in cash. Revenue and cost synergies will mean a neutral impact on earnings per share in 2007, Informa said, with benefits thereafter.
Satellite operator Inmarsat lifted underlying earnings by 24% year-on-year to $99.6m on revenue of $140.8m in the three months to March, slightly ahead of forecasts.
Prologic jumped today after the IT solutions provider announced it has secured a deal with shirt retailer TM Lewin worth an initial £1.68m.
FTSE 100 - Risers
Centrica (CNA) 393.25p +2.14%
Hanson (HNS) 1,057.00p +1.98%
Pearson (PSON) 908.00p +1.97%
Scottish & Southern Energy (SSE) 1,541.00p +1.92%
Home Retail Group (HOME) 494.00p +1.80%
Kelda (KEL) 948.00p +1.77%
Experian (EXPN) 585.00p +1.21%
InterContinental Hotels Group (IHG) 1,263.00p +1.04%
Severn Trent (SVT) 1,518.00p +1.00%
United Utilities (UU.) 763.00p +0.99%
FTSE 100 - Fallers
Rio Tinto (RIO) 3,525.00p -3.48%
Lonmin (LMI) 3,790.00p -3.44%
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Antofagasta (ANTO) 536.50p -2.94%
Vedanta Resources (VED) 1,367.00p -2.29%
Kazakhmys (KAZ) 1,164.00p -2.18%
Anglo American (AAL) 2,874.00p -2.08%
BHP Billiton plc (BLT) 1,199.00p -1.96%
Xstrata (XTA) 2,717.00p -1.70%
Standard Chartered (STAN) 1,585.00p -1.25%
Reuters Group (RTR) 605.50p -1.22%
FTSE 250 - Risers
Britvic (BVIC) 371.00p +4.51%
Abbot Group (ABG) 278.25p +3.92%
N Brown (BWNG) 334.50p +3.88%
Inmarsat (ISAT) 424.00p +3.04%
SThree (STHR) 511.50p +2.76%
Computacenter (CCC) 257.50p +2.49%
Beazley Group (BEZ) 155.50p +2.47%
Carpetright (CPR) 1,100.00p +2.42%
PZ Cussons (PZC) 171.25p +2.24%
De La Rue (DLAR) 712.50p +2.15%
FTSE 250 - Fallers
Mouchel Parkman (MCHL) 418.75p -3.18%
Aga Foodservice (AGA) 398.00p -3.05%
Misys (MSY) 247.25p -2.85%
Ashmore Group (ASHM) 300.75p -2.20%
easyJet (EZJ) 601.50p -2.12%
Soco International (SIA) 1,495.00p -1.97%
Investec (INVP) 750.00p -1.96%
Colt Telecom (COLT) 156.50p -1.88%
Collins Stewart (CLST) 242.50p -1.82%
Hochschild Mining PLC Ord 50p (WI) (HOC) 325.00p -1.81%
