London close: Rate rise fears fuel late slide

4th Dec 2009 17:17

Euphoria over the better than expected US jobless figures proved short-lived as week-end profit taking took hold and miners headed underground.Metal prices weakened in the afternoon session, taking mining stocks with them, as some pundits suggested that with the better than expected jobless figures, the US might be tempted to start raising interest rates earlier than had previously been anticipated. Among industrial miners, Xstrata, Lonmin, Antofagasta, BHP Billiton, Vedanta and Kazakhmys were the hardest hit.Rio Tinto and Anglo American got off lightly, helped by Nomura Securities, which named them as its top two picks in the mining sector. Gold miner Randgold Resources was the biggest faller, as the gold price dived $45 from last night's close, as the dollar picked up after the jobless figures and the interest rate speculation. The price of silver has tumbled by 3%, sapping demand for silver miner Fresnillo.Ukraine-focused iron ore producer Ferrexpo has secured a new pre-export financing of $230m, the first successful financing to be concluded by a metals company with assets in the Commonwealth of Independent States since the global financial crisis began in September 2008, it said.Asia-focused bank Standard Chartered was friendless throughout the day ahead of results next week but supermarket Tesco, which issues a third quarter trading update on Tuesday, was higher.Commercial property groups were hammered after a report by De Montfort University that some £30bn of commercial property debt was in default or in arrears in the first half of the year. Hammerson, SEGRO, British Land and Liberty were all lower.Brokers were queuing up to sing the praises of British Airways ahead of its merger with Spanish airline Iberia. Citigroup raised its recommendation on the shares from 'hold' to 'buy' and lifted its target price from 250p to 280p, while Deutsche Bank also declared itself a fan of the shares.The share price of budget airline easyJet gained altitude after the company said it flew 12% more passengers in November than it did the year before and packed its planes better than last time.The US Food and Drug Administration (FDA) has approved the use of drug giant AstraZeneca's bipolar disorder treatment Seroquel in conjunction with anti-depressants to treat major depressive disorder (MDD).Housebuilder Bellway predicts sales volumes for the first six months to 31 January 2010 will be 10% better than the same time last year, with an operating margin steady at 6% to 7%. Reservations taken between 1 August and 30 November averaged 91 a week, up 51% on a year ago, while cancellation rates are back at a more normal level of around 13%.Fewer sales and lower prices sent profits at London and south-east focused housebuilder Berkeley tumbling in the latest six months. Pre-tax profits came in at £52m for the six months ended 31 October, down 35% on the £79.6m in the same period last year. Sales fell to £290m from £453m.Taylor Wimpey's chairman Norman Askew has said he will leave the board of the housebuilder by the end of December 2010. Askew, also chairman of engineer, IMI, has been chairman of Taylor Woodrow since July 2003 and continued his role when the company merged with Wimpey in July 2007.Contractor Amec lost ground after it said it expects the ongoing external environment to remain challenging. Nevertheless, it unveiled a plan to more than double its earnings to over 100p per share by 2015.Recruiter SThree confirmed profits will tumble this year, though it says conditions have started to stabilise. Full year gross profit will be about £168m, down 23% year on year (2008: £218.9m). Shares in online banking software provider Intelligent Environments fell after it said its revenues and profits for the year to December 31 would not meet market expectations. The firm said the recent announcement of the merger of 'two major UK financial institutions in the building society sector' resulted in the cancellation of an order for one of its platforms.An even bigger tumble was taken by Sound Oil after a reverse takeover of the Indonesia-focused oil and gas explorer collapsed.Shares in IT services group Parity slumped after it said the rate of improvement in revenues from its solutions division will be slower than anticipated.Property and insurance software firm Innovation Group has reported a 12% rise in full-year adjusted profit and announced plans to raise £21m from a placing and open offer at 10p a share.FTSE 100 - RisersBritish Airways (BAY) 212.00p +2.81%AstraZeneca (AZN) 2,843.00p +2.56%Sage Group (SGE) 230.80p +2.44%GlaxoSmithKline (GSK) 1,311.50p +2.22%SABMiller (SAB) 1,830.00p +2.06%Experian Group (EXPN) 602.00p +1.86%Cobham (COB) 240.50p +1.82%Cairn Energy (CNE) 3,138.00p +1.82%Inmarsat (ISAT) 658.00p +1.70%Wolseley (WOS) 1,250.00p +1.63%FTSE 100 - FallersRandgold Resources (RRS) 4,973.00p -4.27%Standard Chartered (STAN) 1,513.00p -3.63%Xstrata (XTA) 1,066.00p -3.44%Lonmin (LMI) 1,809.00p -2.58%Hammerson (HMSO) 407.90p -2.44%Fresnillo (FRES) 865.00p -2.43%Antofagasta (ANTO) 900.50p -2.28%BHP Billiton (BLT) 1,890.50p -2.12%Vedanta Resources (VED) 2,399.00p -2.08%Kazakhmys (KAZ) 1,273.00p -2.00%