FTSE led lower by miners

Monday, 22 March 2010 10:27

By myfinances.co.uk staff

The FTSE 100 dropped 30.58 points, or 0.5 per cent, to 5,619.54 led by a selloff in mining shares after an International Monetary Fund (IMF) official warned that economies will struggle to curb public debt.

John Lipsky, first deputy managing director of the IMF, said in a speech yesterday at the China Development Forum in Beijing that advanced economies face "acute" challenges in tackling high public debt. He also warned that unwinding existing stimulus measures won't come close to bringing deficits back to prudent levels.

Basic resources firms were affected as a result with Vedanta, the largest copper producer in India, declined 2.1 per cent to 2,568p as base metals retreated on the London Metal Exchange. Eurasian Natural Resources Corp, a producer of metals in Kazakhstan, dropped 2 per cent to 1,137p, while Xstrata lost 1.2 per cent to 1,129p.

Shares of Shell slipped 0.8 per cent to 1,929p as crude oil traded below $81 a barrel in New York. The European oil company and PetroChina agreed to buy Arrow Energy after increasing their offer to A$3.5 billion ($3.2 billion).

The companies will pay A$4.70 cash a share for Arrow's Australian business. The price was raised from A$4.45 and is 35 per cent above the stock's level before the initial bid was reported March 8th.

ICAP retreated 2.2 per cent to 383p after the largest interbank broker said it will stop offering a full-service agency cash equities business in Europe and Asia in move that will affect 114 employees.

ICAP expects closing the operations will result in a pretax charge of as much as £51 million. ICAP will report operating losses of about £25 million for the discontinued businesses in the year ended March 31st as a separate item.

• Tags:
• news
,
• share prices