Stock market news Sept 10: Xstrata, Vedanta Resources, BP

Written on:September 10, 2012
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FTSE continues downward trend as investors remain cautious

This morning the FTSE 100 was trading within a narrow range with just 20 points between the intraday high and low, as investors continued to remain cautious ahead of another busy week on the markets.

UK stocks continued a downward trend as drugmakers and tobacco firms added pressure but mining firms did well. Chinese data raised economic-stimulus hopes.

The FTSE 100 index was marginally lower than on last Friday at 5,793.07. The biggest fall in index was seen in pharmaceutical firm AstraZeneca PLC, which was down 1%, after Merrill Lynch downgraded the stock from neutral to underperform, Dow Jones Newswires reported. GlaxoSmithKline was also lower, off 0.8%.

The market was also affected by tobacco firms which added more pressure with British American Tobacco falling 2.2% and Imperial Tobacco Group off 0.8%.

Miners did well after China reported a wider-than-expected surplus, with unexpected contraction of imports in August. Chinese data further showed that industrial activity had slowed down in August, indicating the need for financial stimulus for growth.

China is a major user of natural resources and mining firms are dependent on growth indications from Chinese industry. Metal prices rose as Vedanta Resources increased 3.6%, Antofagasta added 3% and Rio Tinto rose 3.1%.

Xstrata gained 2.3% as it declared that it would announce its decision on the Glencore merger on September 24th. Glencore, on its part, has declared that the revised offer is final. Glencore fell 1.2%.

Oil giant BP rose 1.2% after it decided to sell its interests in a number of oil and gas fields in the US Gulf of Mexico for £3.47 billion ($5.55 billion). Kingfisher PLC, the home-improvement retailer went up 0.8% after Credit Suisse initiated coverage of the stock with an outperform rating.

Associated British Foods fell 2.3% after it announced its income statement for the second half to include a non-cash charge of some £100 million ($160 million) for the impairment of property, plant and equipment at a meat factory in Australia.

Related:
Stock market news Sept 6: Glencore, Barclays, IAG and more

     

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