Weaker metals restrain trade

BRITAIN'S leading share index broke a four-day run of rises, as weaker metal prices dragged London lower yesterday.

The FTSE 100 closed down 6.05 points at 5,527.16, having risen 4.7 per cent over the previous five sessions. Meanwhile, the mid-cap FTSE 250 climbed 53.1 points to 9,665.29.

Miners dropped as metal prices weakened, with copper down as investors warned that demand from China might weaken.

Fresnillo was the hardest hit in the sector, dropping 27p or 3.2 per cent to 812.5p, while Rio Tinto, Xstrata, Lonmin and BHP Billiton all closed lower.

Amec was the heaviest faller in the index, dropping 6.7 per cent, despite the oil services and engineering group posting a 13 percent rise in underlying earnings for 2009. Analysts at Deutsche Bank warned that the outlook for Amec's revenues appeared weak. The shares closed down 55p at 765.5p.

Petrofac, another oil services group, also dropped on the announcement of the demerger of its oil production business, which will be combined with the UK assets of Swedish group Lundin. Shares fell 28p in early trade before recovering to close 9p lower at 1,086p.

Financial firms were higher, with fund management group Schroders posting a strong inflow of funds under management at the end of 2009. The shares topped the FTSE 100, rising 74p at 1,310p.

Banks continued to climb, with the recent reporting seasons adding to optimism in the sector. Royal Bank of Scotland closed up 1.4p at 39.4p, Standard Chartered rose 26.5p to 1,700.5p, and Lloyds Banking Group gained 1.1p to 53.9p.

Insurers were in mixed form, with Aviva dropping 10.2p to 380p after posting a better than expected 3 per cent increase in profits for 2009. James Hughes at CMC Markets said while the results were better than the City had forecast, news that it did not need to pursue acquisitions may have caused unease.

"It seems that the company believe their operations in Europe are already better placed than that of the Asian market."

Prudential, which is set to complete a transformational deal to acquire the Asian business of AIG, rose another 13p to 513p. Shares in the Pru fell 20 per cent earlier this week but have now seen two straight sessions of gains. Admiral, meanwhile, was another major faller, down 32p to 1,210p.

Whitbread, the cafe and hotel chain, fell 5p to 1,472p despite reporting like-for-like sales up 3 per cent in the three months to 18 February, helped by strong performance at its Costa coffee business.

The firm yesterday named EasyJet boss Andy Harrison as its new chief executive.

Among the mid-cap companies, FTSE 250 newspaper group Trinity Mirror climbed 9 per cent, despite profits falling to 72.7 million. A day after broadcaster ITV said advertising rates were increasing, Trinity Mirror reported a similar trend, sending shares up 9.8p to 155.8p.

VT Group also rose, 9.5p to 685p, after it ended its pursuit of rival Mouchel in order to concentrate efforts on defending itself against an unsolicited approach from Babcock International. Meanwhile, Babcock dropped 17p to 518p.

On the Aim, Canadian broking business Canaccord Financial, which established a business in Edinburgh through the acquisition of Intelli last September, was unchanged at 575p, despite announcing the acquisition of Genuity Capital Markets for 186m.

The deal means Canaccord will become the largest independent broker in Canada, and will be larger than rivals such as Evolution Group and Numis.