FTSE 100 movers: Miners surge on Glencore-Xstrata merger speculation

2nd Feb 2012 14:46

Meanwhile, confirmation of a merger between Swiss commodities giants Glencore and Xstrata sent the two stocks to the top of the pile today, with Xstrata jumping 10% and Glencore rising 7%. A merger of mining outfit Xstrata and commodities trader Glencore could create a leviathan valued at around £52bn.Chris Searle, corporate finance partner at BDO LLP, said that this was no real surprise given that Glencore already owns a substantial stake in Xstrata. "Whether this merger triggers another round of consolidation in the industry remains to be seen, given anti-trust concerns around the world, but other companies may feel forced to merge just to keep up with this new giant," he said. Sector peers Vedanta Resources, Antofagasta and Anglo American were also making decent gains.Also worth mentioning, some market reports are citing analysts as indicating something to the effect that "everyone" thought that Glencore would first look to take Kazakhmys' stake in ENRC. Might that premium in ENRC's price now be coming out?Leading the way lower was consumer goods giant Unilever, after the Anglo-Dutch firm reported revenues below expectations and expressed worries over input costs and the global economy. Drugs giant AstraZeneca was also one of the biggest fallers after the company lowered its forecast for revenue contribution from recently launched and pipeline products. Astra announced a 1% rise in full-year revenues and a 29% increase in earnings per share in 2011, but warned that both revenues and earnings will decline in 2012 due to government interventions on pricing and ongoing generic competition. The company also revealed 7,300 job cuts in order to "enhance productivity" and reduce costs. Smith & Nephew was also rising on the news it saw its revenue rise 3.66% to $1,106m in the final three months of 2011 from $1,067m in the corresponding quarter of last year, a tad below market expectations of $1,115m. Underlying revenue growth was 3% year-on-year. While pre-tax profit fell from $258m to $210m, the company highlighted an improvement in the trading margin from 19.8% to 25.2%, above its 24% target. FTSE 100 - RisersXstrata (XTA) 1,228.00p +9.69%Glencore International (GLEN) 460.00p +6.54%Vedanta Resources (VED) 1,311.00p +4.80%Smith & Nephew (SN.) 640.00p +4.49%ICAP (IAP) 376.90p +4.12%Man Group (EMG) 125.40p +3.04%Petrofac Ltd. (PFC) 1,494.00p +3.03%Antofagasta (ANTO) 1,370.00p +3.01%Johnson Matthey (JMAT) 2,220.00p +2.83%Anglo American (AAL) 2,810.00p +2.82%FTSE 100 - FallersUnilever (ULVR) 2,003.00p -3.93%AstraZeneca (AZN) 2,981.00p -3.51%Severn Trent (SVT) 1,518.00p -2.50%United Utilities Group (UU.) 597.50p -1.89%ARM Holdings (ARM) 581.50p -1.86%GlaxoSmithKline (GSK) 1,399.00p -1.79%Capita (CPI) 615.50p -1.52%Sainsbury (J) (SBRY) 290.00p -1.36%BP (BP.) 476.65p -1.31%Carnival (CCL) 1,882.00p -1.26%NR