Volatile markets ebbing and flowing

MINERS and integrated oils swung violently yesterday as investor sentiment ebbed and flowed in another highly volatile session on the London market.

The FTSE 100 Index closed 15.56 points or 0.3 per cent lower at 5,444.82 after swinging in a near-140 point range on contradictory news from Europe and America.

Relatively low volumes were traded as many investors steered clear of the choppy conditions.

Will Hedden, sales trader at IG Index, said: “Miners weighed heavily on the UK’s leading index, with three giants languishing in the bottom five.”

Vedanta Resources was a top blue-chip faller, down 9.5 percent as aluminium losses, rising costs and the weakening Indian rupee hit the miner’s first-half results. Its shares lost 119p to close at 1,131p, while rival Antofagasta was down 21.5p at 1,163p.

But Anglo American rose 1.3 per cent after the miner sold its 24.5 per cent stake in its Chilean Anglo Sur project to Japan’s Mitsubishi for $5.4 billion, above some analysts’ expectations. Shares ended the day 30.5p higher at 2,383.50p, although that was well off intraday highs.

Sentiment was affected after the European Commission slashed its growth forecasts for the eurozone. The EC predicted a meagre 0.5 per cent growth in the eurozone next year as the debt crisis takes hold.

The gloomy figures overshadowed a slight improvement in Italy’s borrowing costs as its ten-year bond yield fell back below the critical 7 per cent mark.

The mood was helped by better weekly unemployment figures in the US as well as a drop in the country’s trade deficit.

The pound was down against the euro at €1.17 as the improved finances in Italy triggered a bounceback in the single currency, while sterling fell to $1.59 against the US dollar.

Supermarket group Morrisons was among the risers after it reported third-quarter like-for-like sales growth of 2.4 per cent. The forecast-beating update helped shares gain 11.3p at 317.8p,

Car parts and bicycles firm Halfords was 3 per cent higher in the FTSE 250 Index, despite reporting a 20 per cent drop in half-year profits due to weaker demand from motorists. With one analyst describing the results as robust, shares in the company lifted 6.6p to 341.6p.

Car insurer Admiral was again a major blue-chip faller following its warning that higher-than-expected levels of injury claims were likely to impact on profits this year. Shares dived 26 per cent on Wednesday and were down a further 8 per cent or 67.5p at 820p.

One of the biggest falls in the FTSE 250 Index came from retailer WH Smith after it said like-for-like sales were down 6 per cent on a year ago in the ten weeks since 1 September. Shares fell 33p to 517p after Panmure Gordon downgraded the stock from “buy” to “hold”.

The second tier leaderboard was topped by Homeserve after it said “very few” customers had left the business despite fears it has mis-sold policies. The firm, which is re-training 500 staff after a review revealed sub-standard sales processes, put back on some of its recent losses to stand 17 per cent or 37.5p higher at 256p.