London afternoon: Resource stocks lose favour

14th Sep 2009 14:11

Resource stocks are friendless today as oil and metals prices shift into reverse.Reports over the weekend suggested some commentators are concerned by the amount of speculative money that is flowing into the minerals sector. Meanwhile copper prices have fallen for the fourth day in a row on over-supply concerns. ENRC, Vedanta Resources and Kazakhmys lead the sector lower. Rio is also lower though the Brazilian National Defence Council has approved the sale of Rio Tinto's Corumbá iron ore mine in Brazil to Vale for $750m. Ferrochrome producer International Ferro slips after saying it slid into a second half net deficit of R341m as a slump in demand and prices prompted severe production cutbacks. The cut back in production caused sales to fall from 207,862 tonnes last year to 101,835 tonnes this year, with a consequential deterioration in economies of scale, the firm said.Platinum refiner Johnson Matthey is struggling after Morgan Stanley downgraded the firm to 'equal-weight' from 'overweight'.In the oil sector Cairn Energy, BG Group and Tullow Oil fall back as the most actively traded future for Texas sweet light crude languishes below $70.Elsewhere, Cadbury is one of the top risers on its strong words against the attempted takeover by US firm Kraft. Rumours of either a higher bid or interest from Hershey continue to support the shares.Insurers are going well after Resolution told the Times it could buy a general insurer as well as a life group. The decision to allow product placement in TV programmes is limiting the loss suffered by the ITV share price, with the Telegaph suggesting it could be worth millions to the firm.Press reports have a less positive impact on the share price of Yellow Pages publisher Yell Group which, according to the Sunday Telegraph, has raised enough institutional support for a £500m rights issue to be a goer.Retail giant Marks & Spencer gets a lift from Morgan Stanley raising its price target to 380p from 280p on expectations that its second quarter sales update due at the end of the month will lead to upgrades in earnings forecasts. Utility Scottish & Southern Energy has attracted the attention of HSBC, which has started covering the company with an 'overweight' rating.Kentz has had a 'strong' first half during which profit jumped 10% to more than $1bn as the engineering group focused on oil and gas, petrochemicals and energy in developing regions. Profit before tax for the six months ending 30 June 2009 rose to $18.5m from $16.8m a year earlier on revenue little changed at $328.9m.Construction and regeneration group Morgan Sindall has won a £38m private/public partnership (PPP) scheme contract to build Basildon Sporting Village, a state of the art leisure complex. Energy meter provider Bglobal has won a contract to provide the UK retail arm of Russian energy company Gazprom with smart metering services.China Wonder reported a drop in half year profits despite a 21% rise in sales revenue and said it continues to actively seek expansion opportunities both in the People's Republic of China and the United Kingdom.Angel Mining, formerly known as Angus & Ross, lost £1.5m in the 12 months ended 28 February versus £4.2m in 2008 following the reversal of impairment provisions of £3.2m linked to exploration costs at Black Angel in Greenland.