Weak miners send London markets lower

| March 7, 2006 | 0 Comments

The London equities markets saw declines on the day on Tuesday as mining shares fell victim to fears that rising interest rates around the world could curb demand for metals. The FTSE 100 dropped 0.7 percent to 5,857.4 and the FTSE 250 declined by 0.9 percent to 9,458.3 on a volume of 3.3 billion shares traded on the day.

Lower prices on metals sent mining stocks down. Antofagasta fell 3.9 percent to £20.21. Xstrata was down 3.8 percent to £16.74, while Anglo American dropped 3.7 percent to £20.50 and BHP Billiton declined by 3.1 to 934½p. Copper miner Kazakhmys, based in Kazakhstan, fell 3.8 percent to 855½p on comments from its chief executive that the company might spend as much as $2 billion this year in diversification.

In the steel sector, Corus dropped 2.7 percent to 72¾p on the news that it will be placed in the FTSE 100 on Thursday.

In the retail sector, N Brown lost 0.8 percent to 212¼p when investors moved to take gains on the news that the company could be a bid target. Book and music retailer HMV Group dropped 4 percent to 182¼p amid rumors that private equity group Permira could abandon plans to purchase the company since its offer of 190p per share was turned down.

Tullow Oil saw a gain on the day of 2.4 percent to 310¾p on the news that its partner, Hardman Resources, had found oil in a well in Uganda, even thought there were few details of the find. The news gained Tullow an upgrade from “reduce” to “hold” from Oriel Resources. Oriel also upgraded Hardman, listed on Aim, from “buy” to “add”, sending Hardman up 3.8 percent on the day to 82½p.

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