London afternoon: Market consolidates gains

2nd Nov 2009 15:11

Footsie has spent the afternoon session consolidating the morning's gains., with miners continuing to be the star performers while financials stumble.Sharply higher metal prices and news that Randgold Resources is keen to bring the renamed Kibali mine into production as soon as possible helped miners.Randgold and its joint venture partner AngloGold Ashanti agreed on Saturday to buy an additional 20% stake in the project, formerly called Moto, for $113.6m from the Congo government. Following this transaction they will each hold 45% of the project, with state-owned OKIMO retaining 10%. Investec has responded to the news by raising its price target for Randgold from 4074p to 4195p.Rio Tinto is also boosted by broker comment, with Citigroup issuing a 'buy' note, while there is renewed speculation that sector leader BHP Billiton will exhume its bid for Rio. Elsewhere in the sector ENRC, Kazakhmys, Lonmin and Vedanta are all sporting big gains.Royal Bank of Scotland is friendless following talk it is close to an agreement with the government over its proposed participation in the toxic asset protection scheme (APS). It also confirmed weekend reports it will have to divest some of its businesses to meet EU rules. The 70% state-owned bank said "It expects the agreement on the APS to reflect market improvements since February and RBS's ongoing recovery whilst giving protection against future potential stressed case losses".Tomorrow, Lloyds is expected to unveil its £25bn refinancing package and reveal how much it has cost to extract itself from the clutches of the APS. Elsewhere in the financial sector insurers such as Legal & General, Standard Life and Old Mutual are weaker as concerns grow that global stock markets have got a bit 'toppy'.Elsewhere, Irish budget airline Ryanair warned that it may cancel existing orders if it does not agree a deal on new aircraft from Boeing as it reported an 80% increase in half year net profits. The figures are likely to be in stark contrast to British Airways, which is expected to report a big loss on Friday.Directories group Yell said it now plans to launch a £500m rights issue after it received acceptances in excess of the 95% threshold required as part of its refinancing proposals. The group said it will now approach its major shareholders and announce details of the equity raise 'as soon as practicable'.Support services firm Babcock has bought nuclear site management UKAEA from the United Kingdom Atomic Energy Authority. Babcock has paid £38m for UKAEA, a company which generated £32m of revenue in the year to 31 March 2009. Power solutions provider Chloride saw pre-tax profit in the half year to 30 September tumble 41% to £10.4m from £17.6m a year earlier, on sales that edged up to £152.7m from £152.3m. Data centre provider Telecity said revenue has been in line with management expectations in the second half of the year. All parts of the group are contributing to revenue growth, resulting in strong operating profit improvement, given that Telecity's cost base is largely fixed.Software and IT services business Sanderson said it expects full year results to be slightly ahead of current market expectations.Irish medical devices firm ClearStream Technologies has swung to a full-year profit and said gross margins have been steadily improving.Shares in Communisis dropped more than 7% in the morning session after the printing group announced a number of management changes. The group said Andy Blundell has taken on the role of chief executive officer (CEO) earlier than planned. Steve Vaughan, who had planned to relinquish the CEO role at the end of the year, has stepped down from the board, but will remain on the payroll until the end of the year as an adviser to the board. Oil and gas firm Dragon Oil confirmed it has agreed to be bought by majority shareholder Emirates National Oil Co for around £2.4bn. Under the terms of the takeover Emirates National Oil Co, which has a 51% stake holding in Dragon Oil, has agreed to pay 455p a share in cash.The delayed full-year results from accounting, business and tax advisory group Vantis have been released showing the company has fallen into the red after taking chunky exceptional charges.