Market Report: Glencore slides again as commodities fall

It may be the biggest float ever seen on the London market, but Glencore's disappointing start to life as a listed company continued yesterday after the commodities trader dipped once again.



The group begins unconditional trading today, and is set to enter the blue-chip index after the session has closed, yet it has been trading on the grey market since Thursday following a prolonged build-up.

Despite its issue price of 530p being seen by some as conservative, Glencore failed to move upwards on its first day and was then pegged back 6p to 524p last Friday, before last night closing 10p worse off at 514p.

Its fall came as metal prices shifted down, resulting in a tough session for the miners that left Antofagasta 47p behind at 1,160p and Anglo American 121p lower at 2,830.5p. There have been fears that Glencore's market debut has arrived at the end of the commodities boom, with Goldman Sachs last month advising investors to take profits.

However, market voices remained optimistic about Glencore's chances despite its weak performance so far. "I don't think [its management] will be worried as it is still early," said Guardian Stockbrokers' Atif Latif, who pointed out a number of tracker funds will be mandated to buy the shares. "As long as they stick to what made them a success thus far I expect they will replicate that as a listed company."

The weakness in the mining sector – prompted by data showing signs of a slowdown in growth in China and the Eurozone, plus fears over the latter's debt crisis – saw the FTSE 100 slump 112.6 points to 5,835.89, its lowest level for two months.

The news that ash from the Grímsvötn volcano in Iceland was travelling towards the UK prompted flashbacks of last year when the eruption of the Eyjafjallajokull volcano caused more than 100,000 flights to be cancelled.

As fears spread a repeat could be on the cards, airlines shares across Europe fell, including International Consolidated Airlines which plummeted 12.6p to 235p. EasyJet was also behind, knocked back 17.6p to 345.1p, with little help provided by a warning from its Irish peer Ryanair over fuel costs.

The airlines were not the only ones affected by the volcanic eruption, as the tour operators Tui Travel and Thomas Cook slipped back 7.6p to 229.8p and 5.7p to 145p respectively. However, JP Morgan Cazone was more positive, saying that although the "reaction seems to be factoring in an economic impact similar to last [year]", a number of factors – including companies being better prepared – means the effect will be limited.

Wm Morrison dropped 10p to 298.3p, following reports over the weekend that the supermarket may make a move for the frozen food retailer Iceland. Matrix's Tom Gadsby was not a fan of the idea, however, saying that while "Iceland generally suits customers on a budget who are prepared to shop in tertiary locations... Morrison's range is rather more aspirational" and that therefore a bid "would be a big mistake".



its announcement last week that it had received a number of approaches – including from the private equity firms Bain Capital and Advent International – means investors have been feeling rather optimistic that not only will Micro Focus receive a formal offer, but that a bid battle would then commence.

However, the software group retreated 17.6p to 381p on the FTSE 250 after Collins Stewart poured cold water on their hopes, saying a bid would not be forthcoming for a number of reasons, most notably because its valuation was too high considering its "pedestrian" growth profile.

"While it would be tempting to hold on to wait for a bid to materialise, we believe that shareholders should consider taking some profits above 400p," said the broker, adding that the group could fall to around 325p if no offer is made.

TalkTalk increased 3.4p to 149.1p, maintaining its strong performance in the wake of its final results last Thursday, since when it has ticked up over 13 per cent. Further support was provided by UBS reiterating its "buy" recommendation on the telecoms group, and the broker also increased its forecasts while adding that there was "scope for a payout rise and merger and acquisition [activity]".

Pole position on the mid-tier index was taken by Mitie, which rose 10.4p to 220.4p after the support services company said its full-year profit had jumped up over 15 per cent. Also updating the market was British Land, and the blue-chip property group was driven back 16.5p to 576p as its final results prompted Panmure Gordon and Peel Hunt to reduce its rating to "hold".



down on the Alternative Investment Market, Fairpoint lost almost a quarter of its value after issuing a profit warning. The financial services company shed 20p to close at 68p following its announcement that it was being hit by a fall in the number of people unemployed.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Mortgage Administrator

£20000 - £25000 per annum: Recruitment Genius: We are a vibrant and establishe...

Recruitment Genius: Payments Advisor

£15000 - £20000 per annum: Recruitment Genius: An experienced Repayments Advis...

Recruitment Genius: Investment Analyst

£25000 - £30000 per annum: Recruitment Genius: This leading provider of financ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Are you looking to take your ...

Day In a Page

Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

‘Can we really just turn away?’

Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

Nine of Syria and Iraq's 10 world heritage sites are in danger...

... and not just because of Isis vandalism
Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

Girl on a Plane

An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
Why Frederick Forsyth's spying days could spell disaster for today's journalists

Why Frederick Forsyth's spying days could spell disaster for today's journalists

The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent
Markus Persson: If being that rich is so bad, why not just give it all away?

That's a bit rich

The billionaire inventor of computer game Minecraft says he is bored, lonely and isolated by his vast wealth. If it’s that bad, says Simon Kelner, why not just give it all away?
Euro 2016: Chris Coleman on course to end half a century of hurt for Wales

Coleman on course to end half a century of hurt for Wales

Wales last qualified for major tournament in 1958 but after several near misses the current crop can book place at Euro 2016 and end all the indifference
Rugby World Cup 2015: The tournament's forgotten XV

Forgotten XV of the rugby World Cup

Now the squads are out, Chris Hewett picks a side of stars who missed the cut
A groundbreaking study of 'Britain's Atlantis' long buried at the bottom of the North Sea could revolutionise how we see our prehistoric past

Britain's Atlantis

Scientific study beneath North Sea could revolutionise how we see the past
The Queen has 'done and said nothing that anybody will remember,' says Starkey

The Queen has 'done and said nothing that anybody will remember'

David Starkey's assessment
Oliver Sacks said his life has been 'an enormous privilege and adventure'

'An enormous privilege and adventure'

Oliver Sacks writing about his life
'Gibraltar is British, and it is going to stay British forever'

'Gibraltar is British, and it is going to stay British forever'

The Rock's Chief Minister hits back at Spanish government's 'lies'
Britain is still addicted to 'dirty coal'

Britain still addicted to 'dirty' coal

Biggest energy suppliers are more dependent on fossil fuel than a decade ago
Orthorexia nervosa: How becoming obsessed with healthy eating can lead to malnutrition

Orthorexia nervosa

How becoming obsessed with healthy eating can lead to malnutrition
Lady Chatterley is not obscene, says TV director

Lady Chatterley’s Lover

Director Jed Mercurio on why DH Lawrence's novel 'is not an obscene story'
Farmers in tropical forests are training ants to kill off bigger pests

Set a pest to catch a pest

Farmers in tropical forests are training ants to kill off bigger pests