Market Report: BHP Billiton under the spotlight after South32 begins trading on the Australian stock market

BHP Billiton was under the spotlight after its spin-off, South32, began trading on the Australian stock market to a lukewarm reception. The shares closed down 70p at 1463p as the market digested the Anglo-Australian miner’s valuation based on its core commodities of iron ore, copper, petroleum and coking coal. Citigroup slashed earnings estimates for 2016 and 2017 by 11-12 per cent and repeated its “underperform” advice.

“Opening trading in BHP Billiton’s South32 spin-off hardly matches the fun and games we saw when Glencore arrived back in 2011,” Chris Beauchamp of IG said. “The commodity boom of the first decade of the 21st century seems like a distant memory, and most investors will opt to wait until the company has proved it can survive on its own before rushing to back it with their own cash.”

The FTSE 100 ended flat, up 8.38 points at 6,968.87, as the spectre of a Greek meltdown returned to haunt the markets. Commodity prices were in the ascendant, lifted by advances in the price of gold, silver and platinum. Mexican gold and silver mining group Fresnillo led the list of blue-chip risers, up 40.5p to 792.5p, after reiterating its silver production target for 2018 remains in place. The news lifted shares in commodities powerhouse Glencore, by 3.7p to 297p, while Randgold Resources was 40p higher at 4,908p.

However, the shine was taken off the aluminium market after Goldman Sachs brought hopes for the metal’s resurgence to a halt by predicting a fall in prices this year due to a small global surplus. Still, it expects prices to turn soon and recover in 2016.

Aveva, up 165p to 2,000p, was boosted by bid speculation and ahead of full-year results today. House broker Jefferies suggested Schneider or Siemens might be on the prowl for the group, which provides software solutions for the marine, chemical and oil and gas industries.

Shares in the online advertising group Blinkx plunged 4p to 35p after the group swung to a pre-tax loss and warned of pressure on its profit margins “due to the change in product mix, competitive influences and audience acquisition costs”.