Sector movers: Rio weighs on mining sector after CEO exit and charges

17th Jan 2013 15:44

Mining stocks were stuck in the red again on Thursday as a surprise departure by Rio Tinto's Chief Executive weighed on the shares and broker downgrades pushed other resources lower."Miners had risen 20% between the middle of November and the beginning of January but have shed 6% as the initial euphoria over a deal to avert fiscal crisis in the US has waned," noted financial sales trader Max Cohen from Spreadex.Rio Tinto was unwanted after its Tom Albanese stepped down as Chief Executive Officer following an announcement by the company that it expects to recognise a non-cash impairment charge of approximately $14bn in its 2012 full-year results. Nevertheless, Citigroup upgraded its recommendation for the firm today from 'neutral' to 'buy', saying that today's announcement should be seen as a buying opportunity. "We believe the market will perceive today's write-downs and management changes negatively in the short term, but that these will be positive for the stock and the sector longer term."Analysts at Jefferies were of a similar opinion, as they reiterated their 'buy' rating on Rio. They said: "While the impairment charges are negative following some disappointing past acquisitions, we believe the Rio investment case remains firmly intact and recommend investors accumulate shares on any near-term weakness."Anglo American was extending losses following Tuesday's shake-up of its platinum division, which includes the closure and several mines and thousands of job losses. Workers staged a protest at one of its mines yesterday as the plans were met with a backlash from politicians and unions alike. The stock has now dropped around 9% over the past week, weighed down further by a downgrade from Exane BNP Paribas today to 'underperform'.Elsewhere in the sector, FTSE 250 precious metals producer African Barrick Gold was slightly lower after it posted a 9% decline in 2012 full-year production.New World Resources was also a heavy faller on the second-tier index after Exane BNP Paribas cut the stock to 'underperform' and reduced its target price from 270p to 230p. The same broker also cut its rating for Xstrata today. Top performing sectors so far todayForestry & Paper 7,749.99 +1.41%Technology Hardware & Equipment 1,033.46 +1.38%Beverages 13,518.25 +1.21%Construction & Materials 3,526.02 +1.08%Fixed Line Telecommunications 2,870.50 +1.06%Bottom performing sectors so far todayOil Equipment, Services & Distribution 25,041.93 -0.62%Mining 19,605.10 -0.50%Electricity 8,968.86 -0.48%Real Estate Investment & Services 1,928.81 -0.47%Gas, Water & Multiutilities 5,244.89 -0.42%BC