Market Report: Cairn fails to offset mining malaise

One way and another, the miners stole the show on the British stock markets yesterday. First up was Cairn Energy, the frustrated Greenland driller, which provided some grist to the City rumour mill through suggestions that it was in the process of selling just under half of its remaining 18.3 per cent stake in Cairn India for up to $940m (£580m).

Cairn is likely to use much, if not all, of the cash it raises to explore new areas, after its campaign to find commercial quantities of oil off Greenland have repeatedly come up dry – although it hasn't given up on the Arctic altogether.

Although Cairn isn't saying anything, the word on the street is that Citigroup is working on the company's behalf to sell an 8 per cent stake in its Indian unit, following the sale of a 3.5 per cent chunk for about $360m in June. Last year, Cairn sold a controlling stake in Cairn India to the London-listed miner Vedanta Resources in an $8.7bn deal. Cairn's investors greeted the imminent windfall with reasonably muted enthusiasm, sending its shares up by 1.2p to end the day at 285p.

Elsewhere, mining stocks fell more generally yesterday, as fears about the global outlook pulled down the value of diggers and related raw material makers more or less across the board.

Evraz, the Russian steel maker part-owned by Chelsea Football club controller Roman Abramovich, was among the biggest casualties, tumbling by 10.4p to 261.5p. The miners' woes continued elsewhere, as Rio Tinto fell 61p to 2,980p, BHP Billiton was down 8.5p at 1,948.5p, Anglo American lost 50.5p to 1,887.5p and Fresnillo 30p to 1,803p.

The declines mean that the UK-listed mining sector as a whole has fallen by 5 per cent since the release of weak manufacturing data out of China, the world's top consumer of metals, last Thursday. The weak Chinese data combined with more general fears about the global economic outlook to offset the expected impact of a new US Federal Reserve asset buying programme and a signal from the Bank of Japan yesterday that it will act boldly and flexibly when necessary to support its economy.

The Bank of Japan's deputy govenor Hirohide Yamaguchi said: "As has been the case up until now, we will take bold and flexible action when necessary, while scrutinising the outlook for the economy and prices as well as risks."

Another miner that fell heavily was ENRC, the Kazakh mining conglomerate, which declined by 13.9p to 330.6p. However, at least part of that decline is thought to stem from reports that the group has shelved plans to split the company in two as a result of market conditions and lower production volumes.

The decline in mining stocks helped drag down the FTSE 100 index by 13.7 points, or 0.24 per cent, to 5,838.84 points, amid concerns about the apparent dischord between France and Germany over how to rescue the eurozone.

The engineering group GKN also contributed to the decline of the blue-chip index, falling by 7.1p to 218.9p as Investec cut its rating on the stock from "buy" to "neutral" and reduced its target price to 240p from 245p.

Among the risers, the Lookers car dealership edged up by 3.75p to 73.5p after it emerged that George Soros had bought a 4.54 per cent stake in the company.

Pharmaceutical and medical companies were also in demand as investors sought safe bets in the face of concerns about the eurozone.

Shares in Shire increased by 31p to close at 1,845p, while Smith and Nephew rose by 7p to 693p. AstraZeneca, the FTSE 100's pharmaceuticals giant, rose by 20.5p to end the day at 2,962.5p.

Meanwhile, one of Russia's largest privately owned lenders, Promsvyazbank (PSB), said it would proceed with an initial public offering by selling its shares in Moscow and global depositary receipts (GDRs) in London.

The bank said it planned to use the proceeds to strengthen its capital to support ongoing development, although it did not disclose when it intends to list or how much it hopes to raise. Some 88.3 per cent of the shares of PSB are owned by brothers Dmitry and Alexey Ananyev. The European Bank for Reconstruction and Development (EBRD) owns the remainder of the shares.

PSB had considered an IPO before the global banking crisis of 2008-2009 but postponed it as the crisis unfolded.

FTSE 100 Risers

GlaxoSmithKline 1442p (up 5p, 0.35 per cent) The pharmaceuticals giant benefited from a wave of, admittedly mild, positive sentiment towards safe bets, amid fears about the eurozone crisis.

Diageo 1724p (up 1.5p, 0.1 per cent) The drinks giant ticked up amid rumours that it was in talks to buy a stake in the Indian drinks group United Spirits.

FTSE 100 Fallers

Royal Bank of Scotland 271.5p (down 4.3p, 1.5 per cent) The banking giant saw its shares drift down as it increased its target for cuts at its investment banking arm by 300 to 3,800 jobs by the end of 2013.

Antofagasta 1260p (down 16p, 1.25 per cent) The miner suffered from generally poor sentiment towards diggers, in the aftermath of weak Chinese manufacturing data on Thursday.

FTSE 250 Risers

Petra Diamonds 118p (up 8.3p, 7.6 per cent) The gem company jumped after telling the market it expected production in the year to next June to grow by 30 per cent.

William Hill 314.8p (up 2.8p, 0.9 per cent) Shares rose in the bookmaker amid reports that it was considering asking shareholders for more than £200m to help fund a planned acquisition of rival company Sportingbet.

FTSE 250 Fallers

Dunelm 662p (down 23p, 3.4 per cent) Shares in Dunelm Group fell despite a positive note from JPMorgan which increased its price target on the homewares chain from 510p to 590p.

Man Group 86.5p (down 1.55p, 1.75 per cent) The hedge fund manager fell as it unveiled details of a restructuring plan aimed at streamlining its bloated capital base and increasing its financial flexibility.

Start your day with The Independent, sign up for daily news emails
News
Ben Little, right, is a Labour supporter while Jonathan Rogers supports the Green Party
general election 2015
News
The 91st Hakone Ekiden Qualifier at Showa Kinen Park, Tokyo, 2014
news
Life and Style
Former helicopter pilot Major Tim Peake will become the first UK astronaut in space for over 20 years
food + drinkNothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
News
Kim Wilde began gardening in the 1990s when she moved to the countryside
peopleThe singer is leading an appeal for the charity Thrive, which uses the therapy of horticulture
Sport
Alexis Sanchez celebrates scoring a second for Arsenal against Reading
football
Life and Style
health
Voices
An easy-peel potato; Dave Hax has come up with an ingenious method in food preparation
voicesDave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
News
i100
News
Japan's population is projected to fall dramatically in the next 50 years (Wikimedia)
news
Life and Style
Buyers of secondhand cars are searching out shades last seen in cop show ‘The Sweeney’
motoringFlares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own