Buoyant Mining Sector Fails to Lift FTSE 100

Trading on the London Stock Exchange was light and cautious, on Wednesday, with members of the Bank of England's Monetary Policy Committee due to appear before the Treasury Select Committee and a statement expected from the Federal Open Market Committee in the U.S. later in the day. Share prices remained mixed, but the overall bias was moderately firmer, as mining and metal stocks were boosted by rising metal prices, and offset weaknesses in defensive pharmaceutical and tobacco stocks.

Dominic Turner
shareprices.com - Wednesday, June 24, 2009

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By mid-session, the FTSE 100 index was up 8.07 points, or 0.2%, at 4,238.09 having closed 4.03 points lower on Tuesday.

Anglo American was, once again, the best performer in the FTSE 100, up 5.9%, despite its rejection of a proposed merger with Xstrata earlier in the week. Anglo American dismiseed Xstrata's proposal as "totally unacceptable", adding that it lacked "strategic merit." Takeover rumours – possibly involving Brazil's Vale SA, and Chinalco, following the collapse of its proposed deal with Rio Tinto – continued to circulate around the stock. Elsewhere in the mining sector, platinum miner Lonmin revealed that it was a water leak that forced the closure of its Number One furnace, and confirmed that it was scheduled to reopen with 30 days, as originally anticipated. Its share price rose 50p, or 4.41%, to £11.84, as a result. Rising metal prices were reflected by other miners, with Kazakhyms, Eurasian Natural Resources Corporation (ENRC), Rio Tinto, Vedanta Resources, and Xstrata making gains of between 2.8% and 5.3%.

 

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