FTSE falls for second day on back of base metal declines

Wednesday, 23 June 2010 01:07

By myfinances.co.uk staff

The FTSE 100 Index fell 23.32 points, or 0.4 per cent, to 5,223.66 in early trading as mining companies declined for a second day.

Meanwhile, in the US stocks tumbled by the most in almost three weeks after home sales unexpectedly dropped and the Standard & Poor's 500 Index slipped below chart levels monitored by analysts. Asian shares paced the retreat today, falling by the most in two weeks, while futures on the S&P 500 rebounded 0.5 percent.

Xstrata declined 1.6 per cent to 1,031p, Rio Tinto, the world's third-largest mining company, lost 1.5 per cent to 3,393p and BHP, the world's biggest, declined 1.5 per cent to 1,959p.

Morgan Stanley today reiterated its forecast for "softening" base metal prices in the third quarter to "reflect anticipated headwinds from growth concerns in Europe and china."

Analysts lowered their weighted average of base metal price forecasts by 3.4 per cent for 2010 and 3.1 per cent for 2011, according to a report sent to clients today.

Lloyds rallied 3.4 per cent to 60.99p after Redburn Partners LLP said the bank may gain more from a cut to corporation tax than it loses from Britain's new bank levy.

Kesa Electricals gained 1.9 per cent to 119.6p after the UK-based operator of Comet and Darty electronics stores swung to a full-year profit as it increased sales in France.

Net income was £40.7 million in the year ended April 30th, compared with a loss of £111.4 million last year.

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