FTSE lower as banking stocks down, mining stocks continue decline

Thu, 8th Apr 2010

Today started with big losses amongst mining stocks with these continuing on a downward trend in the afternoon. Stocks including Xstrata, down 3.84 per cent and Eurasian Natural Resources, down 3.20 per cent pushed the FTSE down. Gaining 2.85 per cent, British Airways' strong performance failed to offset losses. The FTSE 100 index closed at 5,712.70, down by 0.86 per cent or 49.36 points.

British Airways finally tied the knot with Iberia Airlines after 13 years of speculation. In creating the third largest airline in the world, BA faced significant regulatory hurdles and investors welcomed the announcement, boosting the stock by 2.85 per cent. Other winners include prosthetics maker Smith & Nephew, up 1.73 per cent, ICAP up 1.69 per cent and London Stock Exchange Group up 1.50 per cent. Demand for shares in ICAP was triggered by a ratings upgrade from Credit Suisse. However the leader board failed to offset major losses amongst miners and banks. Lower commodity prices and profit taking pushed mining stocks to further lows. Xstrata, Eurasian Natural Resources, Kazakhmys, Antofagasta, Rio Tinto and Fresnillo all lost over 2 per cent. Vendanta Resources closed down 1.5 per cent even though the company reported record iron ore production for Q4.Investors remained concerned about Greek sovereign debt, reducing their exposure to banks. Lloyds Banking Group was the worst performer, losing 2.95 per cent. An announcement by the Bank of England confirmed that it will maintain the status quo on interest rates and quantitative easing. In line with market expectations, it left investor sentiment unchanged.Mid-cap stocks performed slightly better as the FTSE 250 lost 0.39 per cent. Victrex finished up 10.51 per cent, whilst the biggest loser, International Personal Finance, closed down 3.38 per cent.
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