FTSE 100 latest: Miners fall; UK inflation spurs pound

 

The FTSE 100 headed lower today after the commodity-led gains of yesterday were reversed and markets eyed news on UK inflation.

Traders at their desks

Taking stock: Investors are expected to book profits today.

Having seen the Footsie close at a 14-month high yesterday, investors looked likely to book some of those profits.

So it proved, and the FTSE 100 closed 36.7 points lower at 5,345.9.

The spot price of gold hit $1,132.95 per ounce on Monday - another all-time high - pushing miners in London higher.

The price fell back today, to $1,1130 per ounce, clawing back some of the gains made by the miners. Yesterdays highest rise Lonmin was today's biggest faller, down 57p, or 3.28%, to 1,683p.

Rivals Rio Tinto, down 72.5p to 3,232.5p, and Eurasian Natural Resources, 16.5p lower at 890p followed suit with Kazakhmys unmoved at 1,300p.

Shares recovered some ground in anticipation of UK inflation figures, which were slightly ahead of forecasts, with the consumer price index (CPI) rising to 1.5% in October, rising from from 1.1% in September, and the retail price index (RPI) posting a 0.6 percentage point rise from minus 1.4% to minus 0.8%.

It was the biggest month-on-month rise in RPI more than 19 years.

This reinforced the City's view that the Bank of England's quantitative easing programme would have to cease soon, and this pushed sterling to a two-month high against the euro – rising to €1.1290.

Against the dollar, the pound was worth $1.6866.

Telecoms company Cable & Wireless was the biggest riser as it said previously announced plans to split itself into two should be completed by next March.

With C&W also announcing its intention to raise £200m through a convertible bond issue, shares rose 2.4p to 140.7p, a gain of 1.74%.

EasyJet slipped 3.6% after it posted underlying pre-tax profits of £43.7m for the year to September 30, compared with £123.1m in 2008. Shares were down 14.2p at 378p, despite upbeat comments on next year.

Marks & Spencer said it plans to buy back up to £225m of bonds from investors and issue new debt, becoming the latest firm to take advantage of attractive market conditions. M&S shares fell 3.7p to 368.3p

Enterprise Inns fell 8.4%, off 11.2p to 122.4p, as it reported a 21% fall in annual profits and said it expected further pressure on trading profits in the current year financial.

Tomorrow's agenda

Credit checker Experian has been looking to expand into Latin America while it waits for signs of life from UK clients.

So investors will be keen to hear about its progress as well as its latest update on credit card activity and growth trends. Analysts at UBS say they 'don't expect a more bullish tone at this stage' despite the firm sounding "reasonably optimistic" about cutting costs and boosting earnings.

Mothercare posts half-year figures after avoiding much of the malaise that has struck the high Street, because parents have cut back on spending on themselves rather than the kids. Like-for-like sales rose 4.1% in the six months to October, up 17th consecutive quarter of growth in the UK.

It snapped up toy seller Early Learning Centre for £85m in June 2007, and shareholders will want to hear about any other acquisition or expansion plans, including detail on its presence in India - Mothercare made a deal with the country's largest real estate company, DFL Brands, earlier this year. Analysts predict annual profits will hit £40.4m.

The restaurant Group, which operates the cheap chains Garfunkel's and Frankie & Benny's, updates the market on its trading. So far it has profited from the recession. In August, it posted pre-tax profits up 3% and said property development pressures would not stall its plans to open more restaurants.