London midday: Miners gain on euro risk aversion

26th Oct 2011 12:00

The Footsie traded sideways in morning trade, as investors cautiously await today's key EU summit. Markets will be vigilant to any developments in the Eurozone during today's session, but many are expecting European leaders not to provide the "comprehensive solution" that they had initially promised.MARKETS AWAIT CRUCIAL MEETING While the EU summit is expected to take place as scheduled, worrying things slightly last night was news that today's meeting of European Union Finance Ministers (ECOFIN) has been rescheduled to later in the week, according to a European Union (EU) spokesman. In regards to today's summit, the European Banking Authority has identified a capital shortfall of €108bn to recapitalise the region's banks, and while there seems to be a broad consensus on the need to inject this money into the system, officials still remain undecided on two other key issues - how much firepower the European Financial Stability Facility (EFSF) should have and the level of haircuts on Greek debt. One EU official source told CNBC, "The numbers are not yet finalised ? you have to have all parameters in place and see what is needed and what the leverage factor would be. It needs a lot of technical work to come up with a number." "The leaders will agree on the options tomorrow, but whether it will be an agreement with all details remains to be seen. I think it will be challenging ? it will be very difficult to agree on everything." MINERS ON THE RISE, TOBACCO STOCKS LIGHT UPWorries that the EU summit may fail to live up to expectations spurred demand for supposedly 'safe-haven' commodities such as gold this morning. Gold rose to the highest level in a month reaching $1,720 early on but had come down to the $1,712 level by midday. Silver and copper rose 2.37% and 2.35%, respectively.Silver and gold miner Fresnillo was the highest riser, sector peers Randgold Resources and Antofagasta were also higher.Imperial Tobacco made strong gains after cigarette-making peer British American Tobacco announced that organic revenues had risen 7% (constant currency) in the first nine months of the year. However, the latter's share price rise was less pronounced after the firm said that volumes had edged 0.6% down in the same period. Pharmaceuticals behemoth Shire was firmer after Societe Generale upgraded the stock from hold to buy.Smiths Group was the worst performing stock today after going ex-dividend. Following closely behind was high street giant Next after Deutsche Bank downgraded the firm from buy to hold, saying that it expects share price upside to remain muted now until after Christmas. Marks & Spencer fell in sympathy.Cillit Bang and Clearasil maker Reckitt Benckiser was also falling lower after yesterday warning of slower growth in the fourth quarter. BCFTSE 100 - RisersFresnillo (FRES) 1,625.00p +2.59%Imperial Tobacco Group (IMT) 2,254.00p +2.04%Randgold Resources Ltd. (RRS) 6,845.00p +2.01%Burberry Group (BRBY) 1,301.00p +1.96%Shire Plc (SHP) 1,988.00p +1.84%Standard Life (SL.) 217.50p +1.73%Antofagasta (ANTO) 1,170.00p +1.56%Legal & General Group (LGEN) 106.70p +1.43%British Sky Broadcasting Group (BSY) 731.50p +1.39%Wolseley (WOS) 1,841.00p +1.38%FTSE 100 - FallersSmiths Group (SMIN) 940.00p -3.19%Next (NXT) 2,556.00p -2.11%Reckitt Benckiser Group (RB.) 3,264.00p -1.98%Man Group (EMG) 153.50p -1.60%Land Securities Group (LAND) 659.00p -1.35%Marks & Spencer Group (MKS) 327.90p -1.29%Amec (AMEC) 900.00p -1.26%Ashmore Group (ASHM) 324.70p -1.25%Lloyds Banking Group (LLOY) 34.55p -1.22%Rolls-Royce Group (RR.) 714.50p -1.18%