Markets: Xstrata shares hit by UBS downgrade

Falling metal prices and a downgrade from UBS put miner Xstrata on the back foot on Wednesday and dragged its prospective merger partner Glencore lower too. The bank moved its recommendation on both stocks from “buy” to “neutral” as it slashed its target price for Xstrata on the back of disappointing first quarter figures earlier this month.

The miner was 13.2p lower at 985.8p but some of its sector peers fared worse - Fresnillo lost 57p to 1,323p.

Michael Hewson, senior analyst at CMC Markets, said: “Cyclical basic resources sector stocks have struggled as metals prices dropped sharply.”

Commodities giant Glencore, which went ex-dividend, was 7p lower at 363.2p.

UBS was more complimentary about Barclays, raising its recommendation to “buy” after the declines of recent days and saying its recent first-quarter results merited a 6 per cent upgrade to its earnings forecasts for this year. Barclays’ shares were 3p higher at 189.1p, while Royal Bank of Scotland was 0.5p up at 21.9p. But HSBC retreated 0.1p to 534.2p, and Lloyds was off 0.2p at 28.7p despite a note from Investec reiterating its 40p target price.

In corporate results, shares in Scottish Hydro-owner SSE were 4p higher at 1,329p after it reported a 2 per cent lift in profits to £1.3 billion and forecast its dividend will continue to rise by 2 per cent above inflation in the current year.

The wider market was once again pushed lower by concerns over the stability of the eurozone, amid reports that the European Central Bank had stopped monetary policy operations with some Greek banks. In an up-and-down session, the FTSE 100 Index fell by 32.4 points to 5,405.25 points to end at its lowest close since 21 December.

New York: Wall Street ended lower after a choppy session Wednesday night, with the Standard & Poor’s 500 Index logging its fourth straight decline as investors worried about Greece’s future as a member of the eurozone.

The Dow Jones industrial average closed down 32.62 points, or 0.26 per cent, at 12,599.38 while the broader S&P 500 ended the day down 5.83 points, or 0.44 per cent, at 1,324.83. The Nasdaq Composite Index was down 19.72 points, or 0.68 per cent, to close at 2,874.04.