Banking - Finance
Thursday, 04/09/2014, 09:15

Market report: Gold miners lose shine as Russia Ukraine tensions ease


An investor exit from safe-haven gold sent shares in Fresnillo, Randgold Resources, BHP Billiton and African Barrick Gold down on Wednesday

Hopes for an easing of tension between Russia and Ukraine may have cheered European stock markets on Wednesday, but it only created more uncertainty for investors in gold miners.

Gold mining stocks languished near the bottom of the blue-chip index as investors exited the precious metal on news from Ukraine that it had agreed a “permanent ceasefire” with Russia. The Kremlin later denied the truce deal, saying it had merely agreed steps towards a “ceasefire regime”. This sent gold – which investors see as a safe haven and turn to in times of geopolitical risk – back up, but shares in the mining companies that dig it out of the ground remained stuck in a rut.

Fresnillo fell 20½p to 932p, BHP Billiton was down 29p to £18.91 and Randgold Resources slipped 36p to £49.55. Over on the FTSE 250, African Barrick Gold dipped 10.3p to 227.1p.

On the wider market, the FTSE 100 ended the day up 44.41 at 6873.58, its fourth consecutive day in positive territory.
But it was Hargreaves Lansdown that took bottom place on the blue-chip league table as concerns over its margins cast a shadow over a bright set of full-year results. Analysts at Liberum issued a bleak note on Wednesday saying the financial regulator’s retail distribution review, which banned commission for brokers, would make it difficult for the group to deliver double-digit earnings per share growth. Shares in the fund management giant sank 5.8pc to £10.73.
Admiral also fell victim to a downbeat analyst note, after Berenberg fired a missive in the group’s direction, saying it would suffer from a slowdown in the car insurance market. Admiral shares slipped 4.6pc to £12.64.
On a brighter note, airlines enjoyed a boost yesterday as the threat of another Icelandic ash cloud retreated. The volcano they had feared would spew another flight-cancelling ash cloud into the atmosphere has erupted but so far only produced lava. British Airways parent International Airlines Group advanced 5.3p to 370p. EasyJet was not far behind, up 19p to £13.64. Shares in Ryanair, which enjoyed an extra boost from news that its passenger numbers soared to a record high in August, climbed 1.57pc to €7.28 on the Irish stock exchange.
Vodafone shares are still being propped up by takeover speculation, following reports that Japanese telecoms giant Softbank has turned its attentions to its European rival after it abandoned its attempt to expand in America by acquiring T-Mobile US. Shares rose 0.8p to 209.7p in the London-listed telecoms group.
Ashtead, the tool and equipment rental group, claimed top spot on the leaderboard after it upgraded its full-year outlook following a gleaming first half in which it increased profits by 33pc. Shares in the group, which makes most of its money through its US business Sunbelt, climbed 35½p to close at a record high of £10.22.
Investors continued to show their approval for Barclays’ disposal of part of its Spanish operation to Caixabank. The banking giant rose 2.6pc to 228.1p.
Weir Group continued to benefit from an upgrade to “outperform” from Credit Suisse analysts issued on Tuesday. Shares in the engineering giant advanced 2pc to £27.61.
Over on FTSE 250, Just Eat , which joined the stock market in April, topped the leaderboard after a vote of confidence from Jefferies analysts, who crowned it the best digital company investment. Shares in the online delivery company climbed 10.7pc to 298p.
Russian steelmaker giant Evraz was not far behind, with shares up 7.5pc to 115p, amid hopes of easing tensions between the Kremlin and Kiev.
A deal to breed pigs in China lifted animal genetics specialist Genus. The UK group will supply sows for breeding to four major pig farms in Shangdong, Eastern China from its own operations in the country. Shares in the company advanced 0.8pc to £11.44.
The FTSE 100 also welcomed two new entrants last night .
Newly merged Dixons Carphone joined the blue-chip index less than a month after the joint company launched on the stock market. Direct Line, which was spun out of Royal Bank of Scotland in late 2012, also joined the stock market Premier League. The pair knocked out housebuilder Barratt Developments and can-maker Rexam.
There was even more upheaval on the FTSE 250, which introduced seven new stocks at the bottom of the index, all from the recent flurry of IPOs. They comprised Card Factory, over-50s holiday and insurance group Saga, private healthcare provider Spire, TSB Banking Group, property website Zoopla and Kazakhstan’s Nostrum Oil and Gas.
Circassia, the biotech company developing a cat allergy drug which clinched a £200m flotation earlier this year, was demoted from the FTSE 250.
Microchip-maker Imagination Technologies, milk giant Dairy Crest and conference organiser ITE Group were also ousted from the mid-cap index last night, along with BH Global, Exova Group, and Xaar.
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