Weir Group drops to bottom place

SHARES in Weir Group continued their run of poor form yesterday as the Glasgow-based engineering firm finished at the bottom of the FTSE 100 index.

Weir dropped 103 points or 6.3 per cent to 1,546p, dragged down for a second day by a poor performance from miners.

The Scottish company’s minerals division makes machines used by mining companies, leaving it exposed to the lurching share prices of listed players.

Concerns over the strength of the global recovery – and its ensuing effect on demand for raw materials – meant mining stocks took another tumble yesterday.

Kazakhmys dropped 3 per cent or 32.5p to 814p, Xstrata fell 3 per cent or 23.5p to 826p and Fresnillo eased 73p to 1,636p.

Even Randgold Resources, the gold miner that has weathered much of the sovereign debt crisis thanks to the rising gold price, dropped 4.7 per cent or 315p to 6,350p as large institutional investors sold anything they could – including gold and silver – to book profits. Glasgow-based outfit and FTSE 100 constituent Aggreko joined Weir on the faller’s board, with the temporary power supplier down 2.8 per cent or 49p at 1,681p over concerns about the global economy.

The wider Footsie closed up 25.2 points or 0.5 per cent at 5,066.81, recovering a fraction of Thursday’s 246.8-point fall, the largest points drop in nearly three years. London’s blue-chip share index fell below the psychologically-important 5,000 barrier at one stage yesterday.

The index’s partial recovery was led by the banks, with Barclays up 7.2p at 146p, Lloyds Banking Group 1.6p higher at 34.1p and Royal Bank of Scotland ahead 0.8p at 22.8p as rumours circulated that the European Union’s bailout fund might be increased.

David Jones, chief market strategist at IG Index, said: “Hopes for some decisive action resulting from this week’s G20 meeting helped to calm some nerves in the second half of the day – but there are plenty who will remember that European finance ministers had the same expectations last weekend and nothing came of it.”

The pound was up against the dollar at $1.54 after improved gross mortgage lending data and was also up at €1.14 against the euro, which continued to come under pressure from the ongoing crisis.

Vodafone posted strong gains, climbing 2.5p to 161.6p, while Tesco added 8.95p to 365.2p after its announcement on Thursday that it will invest £500 million in price cuts. Evolution Securities responded to the move by upgrading its stance on Tesco from “sell” to “neutral”.

Car parts and bicycles firm Halfords also benefited from broker attention after City firm Daniel Stewart raised its rating from “hold” to “buy” and said fears about the company’s ability to pay a dividend were overblown. Shares were 18.6p higher at 313.1p, while elsewhere in the retail sector, Carpetright fell 2.1p to 477.9p but JD Sports added 17.5p to 850p.

Jersey-based mail order flowers and gardening group Flying Brands dived 39 per cent after the company – back by Scottish retail entrepreneur Sir Tom Hunter – warned that poor trading had left it in danger of breaching banking covenants. Shares fell 7.3p to 11.5p.