London open: Miners fall as China cuts GDP target

5th Mar 2012 08:32

- China cuts 2012 GDP target to 7.5%.- Miners drag Footsie lower early on; Glencore declines after results.- BP up after Macondo settlement.With China cutting its growth forecast to the lowest level since 2004, miners were the worst performers in early trading on Monday, dragging London's FTSE 100 index below the 5,900 level.Wen Jiabao, the Premier of the world's second-largest economy, revealed that the country had reduced its gross domestic product (GDP) target for 2012 to 7.5%, the first time below the 8% level in the last eight years. The economy expanded by 9.2% in 2011."I wish to stress that in setting a slightly lower GDP growth rate, we hope...to guide people in all sectors to focus their work on accelerating the transformation of the pattern of economic development and making economic development more sustainable and efficient," Wen said.Meanwhile, Europe is awaiting a final decision this week on the Greek debt restructuring. Private investors have a March 8th deadline to decide if they will accept a debt exchange in which they will be required to take a 53.5% haircut in an agreement that would save Athens about €106bn (£88bn). The Greek government has set a 75% participation rate in order to go ahead with the deal by Thursday evening, and so that it can in turn secure a €130bn (£108bn) international bail-out package. If too few agree to exchange their bonds then the country faces the real possibility of becoming the Eurozone's first sovereign default. Greek politicians have signalled they are prepared to use controversial collective action clauses (CAC) to impose the restructuring deal. MINERS TANK ON CHINESE GDPThe mining sector was sold off in the opening minutes as Chinese demand concerns weighed on sentiment. Kazakhmys, Fresnillo, Rio Tinto, Xstrata, Vedanta Resources and Eurasian Natural Resources Corp (ENRC) were among the worst performers early on.Glencore also fell despite announcing increases in revenues and earnings in 2011. Revenue during its first year as a listed company was $186bn; a 28% increase compared to 2010. The increase was primarily due to higher average prices in crude oil, copper, wheat and gold. Net income after significant items was up 7% at $4.3bn.Heading the other way was oil giant BP after having finally reached a $7.8bn settlement to resolve the majority of claims stemming from the Deepwater Horizon oil spill in April 2010. Oilfield services group Petrofac also rose strongly after saying that it is growing increasingly confident of hitting its mid-term target of more than doubling its recurring 2010 group earnings by 2015, after a solid 2011.Product testing group Intertek was a high riser after its 2011 results passed with flying colours, with both revenue and profits ahead of market expectations. Supermarket giant Tesco fell despite announcing that it is to create 20,000 new jobs in the UK over the next two years through a significant investment in customer service, redeveloping existing stores and opening new ones.FTSE 250: MISYS UP, KENMARE DOWNFunds advised by CVC Capital Partners and ValueAct Capital Master Fund, the largest shareholder in Misys, are working together on a making a joint cash offer for the financial software provider. Misys has confirmed it is in talks with the pair, and has formed an independent committee of the board ofdirectors to consider all of the proposals before it. Shares jumped over 6%.Meanwhile, the worst performer was mining group Kenmare after it said that final output for January was lower than expected after poor weather conditions and problems in the mining path caused a delay in production at the Moma Mine on the coast of Mozambique. Insurance and reinsurance underwriter Amlin was a heavy faller after saying that it made a loss before tax of £193.8m in 2011, compared with a profit of £259.2m the year before, after being hit by earthquakes in New Zealand and Japan, tornadoes in the US and floods in Australia, Denmark and Thailand.Online grocer Ocado was in demand after saying it expects to see an acceleration in sales growth as the year progresses as its Hatfield distribution centre, which suffered capacity problems in November, is now running at record levels of capacity. BCFTSE 100 - RisersBP (BP.) 508.90p +2.50%Intertek Group (ITRK) 2,359.00p +1.94%Petrofac Ltd. (PFC) 1,598.00p +1.52%Diageo (DGE) 1,521.50p +1.13%Shire Plc (SHP) 2,231.00p +0.77%Reckitt Benckiser Group (RB.) 3,500.00p +0.43%SABMiller (SAB) 2,593.00p +0.39%Associated British Foods (ABF) 1,202.00p +0.33%Meggitt (MGGT) 401.00p +0.22%GlaxoSmithKline (GSK) 1,392.50p +0.22%FTSE 100 - FallersEssar Energy (ESSR) 108.00p -5.10%Weir Group (WEIR) 1,971.00p -3.10%GKN (GKN) 214.10p -1.97%Fresnillo (FRES) 1,859.00p -1.95%Kazakhmys (KAZ) 981.00p -1.90%Serco Group (SRP) 550.00p -1.79%IMI (IMI) 974.00p -1.72%Antofagasta (ANTO) 1,311.00p -1.72%Rio Tinto (RIO) 3,501.00p -1.66%ARM Holdings (ARM) 545.00p -1.62%FTSE 250 - RisersMisys (MSY) 337.50p +6.77%Chemring Group (CHG) 426.00p +3.83%Ocado Group (OCDO) 105.60p +2.52%Jupiter Fund Management (JUP) 257.70p +2.06%Dairy Crest Group (DCG) 322.40p +1.70%Galliford Try (GFRD) 610.00p +1.33%Supergroup (SGP) 541.50p +1.21%Greene King (GNK) 506.50p +1.00%Domino Printing Sciences (DNO) 662.50p +0.99%Kentz Corporation Ltd. (KENZ) 480.50p +0.97%FTSE 250 - FallersKenmare Resources (KMR) 53.80p -6.43%Dunelm Group (DNLM) 483.80p -4.86%Amlin (AML) 338.20p -3.78%Carpetright (CPR) 634.50p -2.68%Hochschild Mining (HOC) 500.00p -2.53%Afren (AFR) 135.30p -2.10%F&C Asset Management (FCAM) 70.00p -2.10%Barratt Developments (BDEV) 144.20p -1.97%Taylor Wimpey (TW.) 48.77p -1.75%Aquarius Platinum Ltd. (AQP) 141.50p -1.74%