News

The decision by the Bank of England to go for a base rate cut of 150 basis points was lost as investors dumped mining shares by the cartload.

Fears that weakness in demand from China could spark a wave of mine closures sent shares prices plummeting across the mining sector.

Vedanta sparked the sell-off as its attributable profit fell by 24.7% in the six months to 30 September and earnings dropped 7% due to lower zinc prices and higher costs. Rio Tinto, BHP Billiton and Anglo American all closed down by more than 10%.

The size of the interest rate cut surpassed even the most optimistic of expectations and provided a lift to retail stocks Marks & Spencer, Next and Kingfisher.

Housebuilders rallied in hopes the cut will give a kick to the housing market. Persimmon, Barratt Developments and Bellway are rose strongly. Heavily indebted groups, such as Punch Taverns and Enterprise Inns also picked up.

Man Group dived after the hedge fund manager saw funds under management fall 9% to $67.6bn and profit before tax slide 24% to $624m in the six months to the end of September. The company had previously indicated that funds under management had fallen to $70.3bn, but extreme moves in markets and foreign exchange in the last week of September dramatically affected the position.

Shares in knee and hip joint supplier Smith & Nephew tumbled as it suspended its share buy-back programme and revealed more regulatory costs for its US Orthopaedic Reconstruction business.

Technology company Invensys fell despite reporting a 12% jump in first half operating profit after it reduced expectations for industry shipments in its controls business due to recent economic events.

The value of private equity firm 3I's unrealised assets slumped by £411m in the six months to 30 September. It blamed the slide in the market price of its quoted assets, a reduction in the multiples used to value part of the unquoted portfolio and an increase in provisions.

South African insurer Old Mutual was posting good gains despite announcing a 9% drop in funds under management as it said it did not plan to raise new money. It also appointed Philip Broadley as new finance director.

RSA Insurance reported an 11% rise in third quarter net written premiums and said it remains confident of delivering strong full-year result despite challenging trading conditions.

Elsewhere in the financial sector banks are under the cosh again, thanks to negative broker comment. Broker Panmure Gordon has reiterated its sell recommendations for Royal Bank of Scotland (RBS) and Barclays as it sees these two banks as the most exposed to further losses "as credit events gain momentum".

Swiss bank Credit Suisse is also bearish on its British counterparts, cutting its price targets for RBS, Lloyds TSB and Barclays. RBS's price target is trimmed to 65p from 70p; Lloyds is cut to 150p from 175p and Barclays' price target is reduced to 200p from 215p.

Electricity generator International Power said 2008 will be another year of growth, with First Hydro and Deeside now expected to generate significantly improved profitability.

Shares in Tomkins dropped after the engineer said it sees its 2008 performance at the lower end of expectations and said its markets have worsened considerably.

Adjusted profit before tax for the half-year has come in slightly better than expected at Tate & Lyle, giving the sugar producer's shares a lift.

Africa-focused gold miner Randgold Resources saw third quarter revenues hit by lower gold prices.

Profit grew by 4.2% at hotelier Millennium & Copthorne during the third quarter thanks to currency movements, although the property business posted a loss for the period.

Budget airline easyJet said its October load factor, the number of passengers as a proportion of the number of available seats, rose to 83.9% compared with 82.5% the same time a year earlier.

Communications technology group Spirent said trading performance for the period since 29 June 2008 to date is in line with the board's expectations and expects earnings for the year also to be in line.

Education publisher Huveaux's full year results will fall short of expectations because of the government's decision to abolish SATs tests for 14-year-olds.

Waste solutions company Shanks Group floated higher after first half results were slightly ahead of expectations.

FTSE 100 - Risers
Marks & Spencer Group (MKS) 252.75p +3.27%
Old Mutual (OML) 55.30p +3.17%
International Power (IPR) 263.50p +2.83%
Cobham (COB) 192.90p +2.06%
Admiral Group (ADM) 994.00p +0.40%

FTSE 100 - Fallers
Man Group (EMG) 270.00p -31.17%
Vedanta Resources (VED) 721.50p -20.54%
Eurasian Natural Resources (ENRC) 289.75p -19.29%
Invensys (ISYS) 138.10p -17.60%
BHP Billiton (BLT) 969.00p -15.00%

FTSE 250 - Risers
Mapeley (MAY) 277.00p +17.87%
BH Global Ltd EUR (BHGE) € 8.20 +8.75%
Bovis Homes Group (BVS) 387.75p +8.54%
Daejan Holdings (DJAN) 3,150.00p +7.73%
BH Macro (BHME) € 12.82 +7.19%

FTSE 250 - Fallers
International Ferro Metals (IFL) 28.00p -38.46%
Cookson Group (CKSN) 172.25p -17.88%
Salamander Energy (SMDR) 130.00p -16.93%
Talvivaara Mining Company (TALV) 151.25p -15.97%
Wellstream Holdings (WSM) 515.00p -14.02%