Market Report: Punters still willing to take a gamble on London Mining

You have to marvel at the boundless optimism of private investors sometimes. Despite London Mining warning that its shares would probably end up worthless, there are still punters willing to take a gamble.

The iron ore miner fell 75 per cent on Wednesday after admitting it was relying on an 11th hour white knight to save the day after emergency finance talks with lenders went nowhere. But yesterday the shares climbed 0.8p to 1.55p, with message boards alive with hopeful chatter about a bid.

The optimism came despite BlackRock World Mining, a fund run by gold mining mogul Peter Hambro’s son Evy, writing off its holdings in London Mining, previously one of its biggest positions, worth more than £50m. BlackRock tumbled 32.7p to 381.7p. Perhaps the fund will be proved wrong in the fullness of time, but it seems unlikely.

Despite marking early gains, the Footsie ended the day lower, down 50.39 points at 6,431.85. Alastair McCaig, a market analyst at IG, blamed Europe for the reverse, saying: “German trade balance figures have confirmed, rather than confounded, the growing fears that rather than leading its fellow members into a healthier recovery, Germany is being dragged ever closer to recession.”

Miners were boosted by results from aluminium producer Alcoa, the first US miner to report third quarter figures. Alcoa shot the lights out with its numbers, helping Rio Tinto add 64p to 3,053p, Antofagasta 11p to 686p and BHP Billiton 8.5p to 1,665.5p. A bounce in the price of gold also helped producers: Fresnillo climbed 46.5p to 770p, Randgold gained 248p to 4,298p and African Barrick Gold was up 6.7p to 207.2p.

Hikma Pharmaceuticals was in demand after Barclays tipped the Jordanian company. The bank thinks recent FDA approval for a gout treatment and the potential for acquisitions means Hikma, up 62p at 1,860p, is likely to rise.

Catalogue retailer N Brown tumbled 46.2p to 302p as it warned about the warmer-than-usual weather. High street rival Next, off 105p at 6,475p, recently reported similar problems.