Weak Mining Stocks Drag FTSE 100 Below 4,300

Dominic Turner
shareprices.com - Wednesday, June 17, 2009

Resource and energy stocks weighed heavily on the index, as metal prices remained well below the highs of last week – copper, for example, remained below $5,000 a tonne – and crude oil prices fell back towards $70 a barrel. Share prices of miners Anglo American, BHP Billiton, ENRC, Kazakhyms, Lonmin and Rio Tinto were down between 3% and 7.4%, whilst those of BP, BG Group, Cairn Energy, Royal Dutch Shell and Tullow Oil also fell by between 0.3% and 2.7%.

Supermarket chain J Sainsbury surprised the market by announcing plans to fund its growth strategy, and take advantage of a weak property market, via a new stock placing worth £225 million and a £190 million offering of convertible bonds. The news was not well received and Sainsbury was one of the biggest losers amongst FTSE 100 constituent companies, down 7.2% at 307½p.

Conversely, BT Group, which gained 8% in the previous session after the publication of the "Digital Britain" white paper, made further headway on Friday. Its share price rose a further 3.1% to 105.7p on the expectation that Government plans to extend broadband Internet coverage would be to its benefit. Broker Morgan Stanley also upgraded the stock to "overweight" and increased its price target. Elsewhere, Lloyds Banking Group, which was one of the few risers in the previous session, was again in the blue, along with Barclays and Royal Bank of Scotland.