London open: Miners buoyant as Rio raises $15bn

5th Jun 2009 08:56

A buoyant mining sector sent Footsie sharply higher in early dealings as investors rejoiced as Rio Tinto launched a $15.2bn rights issue.The cash call follows confirmation this morning that Rio Tinto had scrapped its controversial $19.5bn refinancing deal with Chinese firm Chinalco. The deal also includes a merger of Rio's West Australia iron ore assets with those of bitter rival BHP Billiton.Rio said the cash would enable it to meet its Alcan facility debt repayment obligations fully in 2009 and substantially in 2010. It shares leapt by by more than 10%, with BHP Billiton, Anglo American and the whole sector buoyed by the news. Carphone Warehouse reiterated its 2010 full-year guidance and said it will split itself into two separately listed companies by July next year. The group also reported full-year results. Headline pre-tax profits came to £133m in the year ended 31 March compared with £4m last time on sales of £1,385m from £1,424m previously.Housebuilder Bellway's southern based divisions have experienced a marginally stronger market and will see higher turnover by the year end than the northern based divisions whose markets still remain fragile. Net reservations since 1 February have continued to average 105 per week, securing the volume target of 4,200 homes.Oil and gas giant BG Group has had more success in the Santos Basin, Brazil. A wireline test confirmed the presence of light oil located at depths of around 5,000 metres. Drilling is ongoing at the well, which is located around 250km offshore from Rio de Janeiro and 33km northwest of the Tupi well.SThree, the specialist staffing business, experienced an overall decline in demand for its services in the six months to May, particularly for permanent placements with contract hiring proving somewhat more resilient in all territories. Toy racing car and train set maker Hornby scrapped its final dividend as a combination of the weak pound and recession sent profits tumbling.