Market Report: Investors quick to dig into gold miners

As the blue-chip index headed down, investors rushed to gold miners' shares. On the final trading day of the quarter, Mexican gold and silver miner Fresnillo glistened at the top of the leaderboard, up 75p to 1,852p, followed by Russia's Polymetal International, up 25p to 1,085.5p, while Mali-focused Randgold Resources jumped 140p to 7,615p.

But the popularity of precious-metal-seeking stocks isn't just a flash in the pan. Randgold emerged as the biggest riser on the benchmark index for the entire quarter, with Fresnillo the third-biggest gainer in the period.

The biggest losers in the quarter were Eurasian Natural Resources Corporation (ENRC), yesterday down, 3.5p to 308.7p, and luxury goods group Burberry, off 6p at 1,001p.

Traders in the City started the day feeling positive on hopes that eurozone debt problems could improve, with riskier stocks still on their shopping list. But by the finish, the index had fallen to its lowest closing level in more than three weeks as fears over the true extent of the eurozone debt crisis would not go away.

But the mining sector helped keep the index from falling further as rumours that China, the world's biggest metals consumer, could issue further stimulus measures. Over the entire third quarter, the FTSE 100 was up 3.1 per cent but yesterday, despite the strong rise for miners, it lost 37.35 points to 5742.07 – not clearing the key 5,800 mark at the end of the quarter.

Investors are still waiting for Glenstrata, the $80bn (£50bn) mining and commodity-trading mega-merger. Monday's deadline looms for the overdue Xstrata and Glencore merger, with reports that the pair remain at odds over key issues. Xstrata lost 2.1p to 957.5p and Glencore headed down 0.1p to 343.1p.

The Office of Fair Trading has ordered a Competition Commission probe into the car insurance market as it thinks competition isn't working and customers' wallets are being hit. Among the watchdog's concerns are that if you are involved in a smash, your replacement car or the repairs could be costing more than the market rate. The planned float of car insurance site Direct Line by taxpayer-owned Royal Bank of Scotland had been valued at between £2.5bn and £3.5bn, but yesterday it announced a float at between £2.4bn and £2.9bn. The bank has had to sell the insurance business, which also includes the Churchill and Privilege brands, to meet European regulators' conditions after it was bailed out. RBS shares edged up 0.4p to 257p but news of the probe hit motor insurers Admiral, down 32p to 1,053p and morethan brand owner RSA Insurance, off 1.5p at 110.5p.

Over on the midcaps, electrical retailer Dixons had a strong run. Dealers attributed its rise to approval of chief executive Sebastian James, who joined in the summer and hopes it will have a strong Christmas. Dixons, which sells everything from iPads to kettles, gained 0.38p to 19.78p.

Massive tuition fees may put off some prospective university students but the student accommodation sector is still growing as an influx of overseas students builds. Traders reckon news that Chinese state-owned fund Gingko Tree Investment's proposed purchase of Barclay's 40 per cent stake in the University Partnership Programme (Britain's largest developer of student housing) will also be good news for rival Unite Group. Traders speculated that if overseas investor interest continues, Unite could even become a bid target. Its shares booked in a 6.9p rise to 263.6p.

Shares in logistics business Wincanton continued their good run, driving up 3.25p to 56p after contract wins from B&Q and Sainsbury's. Traders speculated that there could soon be more good news.

Mischievous traders speculated that another bidder could emerge for Sportingbet. The online gambling group, which is already in talks with bookmaker William Hill, rose 0.25p to 51.50p.

AIM-listed Aortech International hasn't found a buyer and is no longer for sale. It is still trying to flog its polymer business but also needs to raise more money. Punters were not impressed and the shares plummeted 65p to 60p.

G4S 265.7p (up 2p, 0.76 per cent) Security company boss Nick Buckles has survived the fallout from its Olympic fiasco but the scalps of its chief operating officer and managing director were claimed.

Babcock International 927p (up 9p, 0.98 per cent) The engineering company will release a trading update to the market next week and analysts expect its core businesses of marine and defence to remain solid.

Compass Group 683.5p (down 21p, 2.98 per cent) Compass Group continued its fall from the previous day after it admitted it will have to reduce its operations in southern Europe. Analysts at Natixis cut its rating to neutral from buy.

Anglo American 1,817p (down 30.5p, 1.65 per cent) The mining giant continued to suffer at the hands of illegal strikers at its South African platinum mines.

Ophir Energy 608p (up 17.5p, 2.96 per cent) The oil group said it will restart its Tanzanian drilling programme with its joint-venture partner BG Group.

Centamin 92.5p (up 2.85p, 3.18 per cent) The mid-cap Egyptian gold miner joined its peers on the FTSE 100 as a top riser as investors piled into precious-metal mining stocks on hopes of further Chinese stimulus.

London Stock Exchange 943p (down 82p, 8 per cent) Strict new rules from European regulators sent its shares tumbling.

Electrocomponents 200.3p (down 19.4p, 8.83 per cent) The specialist electronic components and maintenance firm warned that half-year profits will slump by a third. The forecast was worse than expected, and sent it to the bottom of the mid-cap index yesterday.

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