Market Report: Deal-hungry Xstrata beats the sliding ftse

Although its fellow heavyweight diggers fell to earth with a bang, Xstrata managed to avoid a large part of the sell-off across the Footsie last night. Amid vague rumours that it could be casting an acquisitive eye across the Atlantic, the Swiss giant was given a boost after being picked out as one of the cheaper mining stocks.

Claiming that, intra-sector, the difference between "cheap and expensive" stocks is particularly stark at the moment, UBS said the valuation gap was likely to close and chose a number of cheap-looking stocks which could benefit.

With Xstrata one of the names highlighted among the mining groups, it managed to touch a session high of 964.6p during trading. Despite ending up 16.5p worse off at 938.5p, it still outperformed its peers – including Eurasian Natural Resources (down 36.5p to 611p) and Kazakhmys (off 48.5p at 846.5p) – which suffered heavy losses along with commodity prices.

Xstrata also became the latest to be linked with Walter Energy, as market gossips refused to give up on the US miner's takeover potential. Persistent bid speculation around the coking coal producer recently has claimed a number of big names could be possible bidders, although this hasn't stopped Walter's share price from more than halving since July.

As well as Xstrata, the latest return of the vague rumours once again suggested Rio Tinto (down 149.5p to 3,035.5p), BHP Billiton (66p less at 1,835.5p) and Brazil's Vale – among others – could be mulling over a potential approach as well, and there was also speculation claiming possible bidders could start stake-building in an attempt to thwart their rivals.

Analysts were playing down the tale, however, noting that – although Walter may have its attractions – Xstrata has recently turned its focus away from M&A activity and towards organic growth.

Traders said there was still hope in the Square Mile that Xstrata might become a takeover target itself, after constant speculation over the possibility of a tie-up with commodities trader Glencore (down 9.1p to 383.55p).

On another day of thin volumes, the FTSE 100 lost all and more of Tuesday's gains as it was pushed back 123.35 points to 5,366.8 points. Fears surrounding the eurozone continued to cause damage, and there was also disappointment over the lack of hints from America's Federal Reserve regarding the possibility of QE3.

Only one stock, supermarket giant Wm Morrison, closed ahead, although Resolution managed to limit its losses and edged down 1p to 250.9p. The insurance buyout specialist revealed Clive Cowdery has spent more than £600,000 on shares, buying in at 252.91p a pop.

Lloyds was unable to rise despite the news that Antonio Horta-Osorio is returning to the helm in January. It declined 0.65p to 24.07p after Citigroup said the worst was yet to come for the sector, predicing that the banks' share prices will not reach a trough until next year or even 2013.

Despite takeover talk around Bodycote, the heat-treating group retreated 8.6p to 247.3p. Panmure Gordon's Oliver Wynne-James said the engineer was looking "ripe for a transfer to private ownership" and added that it was a more attractive proposition than its peer Charter, which is being bought by US manufacturer Colfax.

After presiding over three profit warnings this year alone, the resignation of Neil Gaydon as chief executive of Pace saw the set-top box manufacturer power up 3p to 69.75p.

Meanwhile, with gold prices on the slide, Allied Gold Mining dropped 9.2p to 152p as the yellow-metal digger said its Simberi mine in Papua New Guinea remained unaffected by yesterday's earthquake in the country.

The clothing retailers were in a relatively good mood after Supergroup – 7.16 per cent higher at 152.2p – revealed recent improvements in trading, which meant fellow fashion chain Next was only 5p worse off at 2,586p. Still, traders were urging caution regarding the high street stocks, with one noting that they looked "vulnerable", and JPMorgan Cazenove said it expected to see more losers than winners over the Christmas period.

Down on AIM, Northland Capital's Ryan Long was doing his best to polish the smaller diamond producers. Saying that nearly a third of all Chinese brides now wear diamond engagement rings, up from a mere 1 per cent in 1994, he claimed this trend was set to continue. As a result, he kept his "buy" rating on Petra Diamonds and Stellar Diamonds, although the former was pegged back 7.5p to 111.5 while the latter stayed steady at 3.88p.

Elsewhere, tiddler Acta shot up 46.81 per cent to 8.62p after the clean energy group revealed a deal that will see its energy used by Taiwan's APFCT in its refuelling stations for environmentally friendly vehicles.

Voices
voicesGood for Lana Del Rey for helping kill that myth, writes Grace Dent
Sport
The Pipes and Drums of The Scottish Regiments perform during the Opening Ceremony for the Glasgow 2014 Commonwealth Games at Celtic Park on July 23, 2014 in Glasgow, Scotland.
Commonwealth GamesThe actor encouraged the one billion viewers of the event to donate to the children's charity
Sport
Karen Dunbar performs
Entertainers showcase local wit, talent and irrepressible spirit
Arts and Entertainment
The Tour de France peloton rides over a bridge on the Grinton Moor, Yorkshire, earlier this month
film
PROMOTED VIDEO
Life and Style
fashion Designs are part of feminist art project by a British student
News
Very tasty: Vladimir Putin dining alone, perhaps sensibly
news
Life and Style
Listen here: Apple EarPods offer an alternative
techAre custom, 3D printed earbuds the solution?
News
The University of California study monitored the reaction of 36 dogs
sciencePets' range of emotions revealed
Arts and Entertainment
The nomination of 'The Wake' by Paul Kingsnorth has caused a stir
books
News
Joining forces: young British men feature in an Isis video in which they urge Islamists in the West to join them in Iraq and Syria
newsWill the young Britons fighting in Syria be allowed to return home and resume their lives?
News
Snoop Dogg pictured at The Hollywood Reporter Nominees' Night in February, 2013
people... says Snoop Dogg
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
i100
Life and Style
food + drinkZebra meat is exotic and lean - but does it taste good?
News
Bey can do it: Beyoncé re-enacts Rosie the Riveter's pose
newsRosie the Riveter started out as an American wartime poster girl and has become a feminist pin-up. With Beyoncé channeling her look, Gillian Orr tells her story
Life and Style
Donna and Paul Wheatley at their wedding
healthShould emergency hospital weddings be made easier for the terminally ill?
Arts and Entertainment
Residents of Derby Road in Southampton oppose filming of Channel 4 documentary Immigration Street in their community
tv
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

PMO Analyst - London - Banking - £350 - £400

£350 - £400 per day: Orgtel: PMO Analyst - Banking - London - £350 -£400 per d...

Cost Reporting-MI Packs-Edinburgh-Bank-£350/day

£300 - £350 per day + competitive: Orgtel: Cost Reporting Manager - MI Packs -...

Insight Analyst – Permanent – Up to £40k – North London

£35000 - £40000 Per Annum plus 23 days holiday and pension scheme: Clearwater ...

Test Lead - London - Investment Banking

£475 - £525 per day: Orgtel: Test Lead, London, Investment Banking, Technical ...

Day In a Page

Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
Climate change threatens to make the antarctic fur seal extinct

Take a good look while you can

How climate change could wipe out this seal
Should emergency hospital weddings be made easier for the terminally ill?

Farewell, my lovely

Should emergency hospital weddings be made easier?
Man Booker Prize 2014 longlist: Crowdfunded novel nominated for first time

Crowdfunded novel nominated for Booker Prize

Paul Kingsnorth's 'The Wake' is in contention for the prestigious award
Vladimir Putin employs a full-time food taster to ensure his meals aren't poisoned

Vladimir Putin employs a full-time food taster

John Walsh salutes those brave souls who have, throughout history, put their knives on the line
Tour de France effect brings Hollywood blockbusters to Yorkshire

Tour de France effect brings Hollywood blockbusters to Yorkshire

A $25m thriller starring Sam Worthington to be made in God's Own Country
Will The Minerva Project - the first 'elite' American university to be launched in a century - change the face of higher learning?

Will The Minerva Project change the face of higher learning?

The university has no lecture halls, no debating societies, no sports teams and no fraternities. Instead, the 33 students who have made the cut at Minerva, will travel the world and change the face of higher learning
The 10 best pedicure products

Feet treat: 10 best pedicure products

Bags packed and all prepped for holidays, but feet in a state? Get them flip-flop-ready with our pick of the items for a DIY treatment
Noel Fielding's 'Luxury Comedy': A land of the outright bizarre

Noel Fielding's 'Luxury Comedy'

A land of the outright bizarre
What are the worst 'Word Crimes'?

What are the worst 'Word Crimes'?

‘Weird Al’ Yankovic's latest video is an ode to good grammar. But what do The Independent’s experts think he’s missed out?
Can Secret Cinema sell 80,000 'Back to the Future' tickets?

The worst kept secret in cinema

A cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
Facebook: The new hatched, matched and dispatched

The new hatched, matched and dispatched

Family events used to be marked in the personal columns. But now Facebook has usurped the ‘Births, Deaths and Marriages’ announcements