Market Report: Mining dividends pay out for FTSE 100

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The miners paid dividends for the FTSE 100, helping it to shrug off some early jitters to close up 31.41 points at 5092.3. Randgold Resources glittered as it led the risers through the session. The market cheered a jump in profits at the West African-focused group, as well as a bigger-than-expected rise in the dividend, sending the stock up 271p to 4480p. The group's full-year profits rose almost 80 per cent to $84.3m from $47m the previous year. The lift was backed by the record rise in gold prices at the end of last year, as well as a strong performance in the fourth quarter, especially at its operations in Mali.

Xstrata also surprised the market by reinstating its dividend, with its chief executive, Mick Davis, making bullish noises on the outlook for commodities. Analysts at Liberum Capital said the decision to pay the 8¢ a share dividend was "evidence of the board's increasing confidence of the business outlook". The group's net earnings pre-exceptionals beat consensus expectation to hit $2.8bn, "representing a strong turnaround at the group," Evolution Securities said, with its analyst Charles Kernot upgrading the stock to "add". The shares rose 33.8p to 983.8p.

The mining sector was further boosted by a bullish report from Citigroup, which raised the price target on 11 mining stocks listed on the London markets. The broker's commodity team upgraded its metal price forecasts to "reflect a bullish view on OECD demand recovery," its analyst Jon Bergtheil said. Among its top picks in the sector were Fresnillo, which was the second highest performer of the day, up 35.5p to 705p.

International Power was feeling sparky after The Independent on Sunday revealed that GDF Suez was looking at a revised offer, after original talks collapsing a month ago. Shares in the group rose 6.7p to 320.6p.

Also up was Icap, the interdealer broker, which reclaimed some of the 20 per cent of value it lost on Friday when a profit warning shocked investors. Credit Suisse put out a note supporting the stock yesterday, and raised its rating from "neutral" to "outperform". The Swiss broker said the decline so far this year offered an "attractive entry point for investors" and the shares rose 9.7p to 303.7p

On the downside, the ongoing uncertainty over the state of sovereign debt once more rocked the financials. The insurers retreated together, and the worst on the entire day was Legal & General, which gave up 2.6p to 71p.

Crude oil had a bumpy day on Friday and was looking fragile yesterday, settling at $71.1 per barrel for March delivery, falling on the strength of the dollar against the euro. BG Group fell 17.5p to close at 1094.5p after Barclays cut the group to "equal weight" from "overweight".

On the second line, the stockbroker Brewin Dolphin increased 5p to 134.9p on the back of a Daniel Stewart note, which reiterated its "buy" recommendation on valuation grounds. The report said that after cost-cutting, on a "medium-term view the current valuation looks compelling".

As the snows came down again in the UK, there were dark clouds over the environmental consultancy RPS Group. The stock was sold on Friday despite an in-line update, and it was hit further yesterday as Altium cut its price target from 200p to 180p with a "hold" rating. The stock closed down 10.6p to 172.5p.

On the Alternative Investment Market, the penny stock Petards Group was hoist to among the top of the risers, up 29.41 per cent to 0.42p. The CCTV company put out a trading update yesterday saying its full-year pre-tax profits were likely to beat market expectations.

Also on Aim, Daisy Group, a telecoms provider, has secured its fourth deal in six months, as it bought Managed Communications, a data network provider, for up to £6.3m. This marks a whopping 26 takeovers since it was set up almost a decade ago. Analysts at Liberum Capital reiterated their "buy" recommendation, upping its estimated full-year 2011 earnings per share by 4 per cent. Joe Brent said: "Daisy is executing on its stated strategy of consolidating the small and medium enterprises telecoms services market. We expect further, perhaps more material deals to follow shortly." The stock bloomed 2.75p to 97.5p.

Alliance Pharma also rose on the back of the deal, advancing 4p to 26.25p as it secured assets from Cambridge Laboratories. The pharmaceutical group is set to pay £14.3m and £16.4m plus the value of the inventory for a portfolio of 18 prescription products, with the deal expected to be earnings-enhancing in its first year.

On the downside, BATM Advanced Communications results came in below expectations, sending the shares down 15.8 per cent, or 8.5p, to 45.25p. The Israeli telecoms group saw full-year profits drop a fifth.

Elsewhere, Amino Technologies swung to a full-year loss of £5.9m from a profit of £1.4m the previous year due to "order slippage and component shortages". The internet television group's shares rose 2.5p to 34.5p, however, as the chairman, Keith Todd, predicted a better year in 2010 and a "substantial contract win with a top operator in Western Europe".

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