Daily Mail

Mining sector in a hole after broker downgrade

- By Ian Lyall

ON A see-saw day for the FTSE 100, the miners endured a difficult session.

Rio Tinto led the retreat, falling 3.5pc, or 136p, to 371p as City broker Liberum moved to ‘sell’ on stock in the digger. According to analyst Richard Knights, the outlook for the iron ore market is ‘a bit shaky’.

His research echoes a welter of other notes on the sector that paint a bleak picture, with the state of the Chinese economy and the deteriorat­ion of Sino-American trade relations chief among the worries.

Russian steel producer Evraz (down 3.3pc, or 17.8p, to 519.8p) and BHP Billiton (down 2.4pc, or 37.4p, to 1545p) were also trampled in the stampede.

A Government climbdown over the amount which customers can bet on fixed- odds betting machines has ended weeks of uncertaint­y for the FTSE’s gambling giants, causing their shares to rise. The Government had proposed to lower the maximum bet on the highly addictive machines, found in bookies’ shops, from £10 to £2 next October.

But policymake­rs have agreed to bring this forward to April after campaigner­s accused them of delays. Although the new rules are predicted to cause losses for the gambling companies, Ladbrokes Coral’s owner GVC was relieved as it would have had to pay former Ladbrokes shareholde­rs £670m if the new rules had not been introduced before the end of March. Its shares shot up 5.6pc, or 43.5p, to 821p.

The FTSE ended the day down 19.97 points, at 7,033.79, having at various points in the session traded 50 points below Tuesday’s close and 50 points above it. To say investors didn’t know which way to jump would be a slight understate­ment with the gyrations in sentiment caused by political fisticuffs over Theresa May’s Brexit plan.

But there was still the odd bright spot. Long- suffering backers of Micro Focus, who have seen the value of their holding almost halve over the past year, were provided a little ray of sunshine by Goldman Sachs, which took a liking to the tech stock.

Having endured a bout of corporate indigestio­n that followed the acquisitio­n of Hewlett Packard Enterprise’s software business, Micro Focus is now ready to deliver, according to Goldman.

Cost savings from the deal are coming through, while some form of capital return may be on the horizon, the Wall Street bank said. Goldman reckons the shares are worth 1700p each. They closed up 6.3pc, or 82.5p, at 1389.5p.

An upgrade by HSBC gave retailer Next a 1.7pc, or 92p, boost to 5372p, while Royal Mail was up 2.4pc, or 8p, to 348p ahead of interim results this morning.

Smiths Group, a staple of the top-flight index, is doing the splits – with the industrial and medical legs of the business walking off in separate directions. The technical term is demerger and the plan is to dispense with the discount rating that comes with being a conglomera­te business. In other words, the sum of the parts are worth more than the whole.

City applause was muted rather than rapturous with shares sneaking up 5.3pc, or 69p, to 1384p.

It’s hard to believe an ailing format such as the X Factor could be responsibl­e for a 5.4pc rise in the shares of ITV. But the reality show’s 4m viewers obviously are valuable in the eyes of the market. and the shares advanced 8.2p, to 158.75p, on news it had picked up the rights to the Simon Cowell produced show until 2022.

Shares in temporary generator specialist Aggreko took a hit, falling 9.2pc, or 78.6p, to 773.4p after analysts had more time to dig into Tuesday’s trading update.

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