MARKET REPORT: Miners lose iron grip as ore prices tumble
HEAVYWEIGHT miners dragged leading shares lower yesterday amid concerns over tumbling iron ore prices.
Fears that Chinese steel production could be nearing a peak dented BHP Billiton and Rio Tinto, down 35p to 1625p and 62p to 2942p, while Anglo American weakened 40p to 1323p.
The FTSE 100’s four-day winning streak came to an end as it closed 12.53 points lower at 6696.60.
Ongoing bid chatter boosted top flight water companies Severn Trent 58p to 2081p and United Utilities 11½p to 914½p.
Babcock International advanced 20p to 1118p after it was named by the Ministry of Defence as preferred bidder for the sale of its equipment, repair and maintenance land business.
Investors threw their weight behind AstraZeneca’s strategy to boost its medicine cabinet as an independent company should previous US suitor Pfizer fail to return. Shares in the drugs giant gained 81½p to 4766½p.
Engineer Weir Group rebounded 26p to 2068p as UBS sought to allay concerns over the impact on the company from a falling oil price.
Brent recovered slightly yesterday to $79-a-barrel.
A sustained period of $70 oil may already be priced in
The broker said: “Our scenario analysis suggests that a sustained period of $70 oil may already be priced in, with significant upside if the oil price were to rebound back towards $90-100.”
Greene King, off 35½p to 750½p, was among a string of pub companies losing ground, with some dealers suggesting it could be wavering over its proposed takeover of Chef & Brewer owner Spirit, 6½p lower at 101½p.
Buy support from Berenberg with an 1850p target lifted funeral services company Dignity 29p to 1577p, while investors warmed to insulation group SIG, up 6p to 155¼p, after positive comments from the same broker.
Car insurer Esure accelerated 3p to 200p as Exane BNP Paribas turned buyer with a 235p target after a 25 per cent drop in the company’s shares over the past three months.
Big Yellow Group jumped 16p to 563½p as it raised £79million in a share placing to buy full control of self-storage sites outside London, but troubled support services company Serco Group fell a further 17½p to 192½p.
On Wall Street, the Dow Jones was down 2.09 points to 17685.73 by the close of trading.
