Mining giants laid low by broker cut

goldman Sachs hit London’s heavyweight mining sector with a raft of downgrades yesterday, pushing the FTSE 100 into the red as investors kept a nervous eye on Cyprus.

The investment bank cut its price forecasts for iron ore over the next three years, while also putting Rio Tinto on its “conviction sell” list, sending shares down 5.2 per cent at 3,107p. BHP Billiton wasn’t spared either, with a move from “buy” to “neutral” helping the stock slip 3.5 per cent at 1,981p.

Engineer Weir Group – which supplies miners as well as oil firms – was down 4.4 per cent or 106p at 2,325p. The Glasgow-based firm was also on the receiving end of a downgrade from Berenberg Bank.

The wider market was buffetted by mixed news from Cyprus as politicians tried to find a way to spare smaller savers from a windfall tax on bank deposits amid warnings that the debt-ridden country could be forced out of the single currency. The FTSE 100 closed 16.6 points lower at 6,441.3p, while the pound hit a five-week high against the euro of €1.17 amid reports, later denied, that the Cypriot finance minister had resigned.

Michael Hewson, senior analyst at CMC Markets, said: “Time will tell as to how these events will unfold but for now markets are reacting by reflex and piling into safety trades.”

Centrica powered up 5p at 355p, Severn Trent gained 28p at 1,673p and United Utilities was up 11.5p to 695.5p.

Sainsbury’s was another riser, up 2 per cent or 6.2p to 371.4p, after quarterly sales figures topped City forecasts. With further evidence that it has gained market share by keeping its nose clean amid the horse meat scandal, rival Tesco was 2.6p lower at 380.1p and Morrisons fell 1.6p to 269.7p.

NEW YORK: The Standard & Poor’s 500 Index fell for a third session last night, but pared losses late in the day after lawmakers in Cyprus rejected a proposed tax on bank deposits, easing fears of a bank crisis.

The Dow Jones industrial average inched up 3.84 points, or 0.03 per cent, to end at 14,455.90 while the broader S&P 500 dipped 3.75 points, or 0.24 per cent, to finish at 1,548.35. The Nasdaq Composite Index fell 8.50 points, or 0.26 per cent, to close at 3,229.10.