Market Report: BHP Billiton soars on hopes for Australian mine

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The Independent Online

On a quiet Monday, the markets were dominated by the miners with BHP Billiton the stand-out stock. The joint Australian and UK-listed giant soared in early morning trading after speculation it was set to announce the largest gold resource in the world. Reports said the group would upgrade its reserves at the Olympic Dam site in Australia when it releases its annual report tomorrow. The miner topped the leaderboard for much of the day, closing up 5.68 per cent at 1750p.

The news, coupled with a rally in the sector last week as commodity prices rose, provided a further fillip to its peers. Metals and mining group Vedanta Resources was up 4.68 per cent to 2235p, while South American copper miners Antofagasta ended the day as the best performer, up 6.64 per cent 1750p.

Another solid performer was Marks & Spencer, which strengthened following support from Deutsche Bank. The German broker slapped a price target of 815p on the stock, saying the shares had underperformed the market over the summer and there could be positive second-half news, including a potential share buyback. The supermarket closed up 25p at 592p.

Shares in Smiths Group rose more than 2 per cent to 1050p as the market anticipated a pre-tax profit rise in its full year results tomorrow. Speculation did the rounds in the morning that the group's chief executive would step down this week. Credit Suisse re-initiated its coverage on the stock with an "outperform" rating, adding "the looming change of chief executive will be closely watched to get a view on the future direction of the company".

More rumours of senior moves in the FTSE 100 came at Scottish & Newcastle. Chief executive Tony Froggatt is to announce his decision to leave the brewer, according to weekend reports. The shares closed down 6p to 628.5p.

Unsurprising Northern Rock was still in focus, and after a volatile morning session slumped to the worst blue chip performer by the close. The beleaguered lender finished 11.34 per cent lower at 172p, its lowest point yet. The financials came in weaker, with Barclays performing badly. It shed 17.5p to close at 616p after reports it was set to sell Firstplus, its consumer loan division, for less than the value of the loans.

Disappointing full-year earnings hit Wolseley, sending the stock 4.83 per cent lower at 807.5p. Pre-tax profits at the building supplies group tumbled from £817m in 2006 to £758m this year, primarily over its exposure to the US housing market.

It was a difficult first day for those newly promoted to the top tier. Taylor Wimpey finished second-worst performer, down 5.82 per cent to 271p, while Tullow Oil lost 7p to 600p. Another sufferer was Carphone Warehouse, closing down 3.75p at 368p. On the second tier, Aquarius Platinum has shrugged off recent problems to soar to record highs yesterday. The shares were smashed at the end of July after strikes at its mines in South Africa caused the group to lose about 4,700 ounces of platinum. The falls have since prompted investors to pile in, and the miner closed up 6.56 per cent at 1853p. Elsewhere Aggreko rose after winning a contract with Empresa Nacional de Electricidade to supply temporary power to Luanda "to help sustain the rapid growth of the Angolan economy". The temporary power provider was 574p higher in the morning, although softened to close 5p up at 574p.

Worst performer on the second tier at lunch time was Benfield Group following a bearish report released by Numis Securities. The broker's decision to downgrade its rating to reduce over a forecast fall in reinsurance volumes, sent the shares slumping 13.25p, although it rallied at the close, 3p down at 270p.

On the growth market, Anglo Asian Mining blazed a trail, as with its peers on the top and mid tiers. Investors piled into the copper and gold developer after it announced a $5m credit facility to develop its Azerbaijan mines. The shares soared 70.38 per cent to 13p.

Another riser was KleenAir Systems International. The filtration group saw a "significant increase in orders" after Transport for London approved its filters for HGV operators needing to comply with London's low-emissions zone. The shares strengthened 15.15p per cent to 19p.

Takeover speculation drove SCI Entertainment to rebound yesterday. The computer games company, which created Lara Croft, has reportedly become the focus of a three-way bid battle. The names, supposedly, in the frame are Ubisoft Entertainment, Time Warner and an unnamed Chinese suitor. It closed up 9.01 per cent at 381.25p.

At the other end, the woes continued at Erinaceous Group, which shed 46.9 per cent to close at 57.75p. The housing group, whose share price was smashed after potential bidders walked away last month, said it is in talks with its lenders after breaching covenants in its credit agreement.

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