By Carla Mozee and Sara Sjolin, MarketWatch
Mining shares slump after Fresnillo earnings disappoint
LONDON (MarketWatch)--After bouncing between gains and losses,
the U.K.'s FTSE 100 index ended Wednesday on a high note, helped
higher by well-received earnings reports from ITV and Standard
Chartered.
The FTSE 100 rose 0.4% to end at 6,919.24, breaking a three-day
losing streak.
ITV PLC drove to the top of the blue-chip index, rising 5.7%
after the broadcaster said it would return 250 million pounds
(http://www.marketwatch.com/story/itv-returns-cash-to-shareholders-as-profit-rises-2015-03-04)
($384.5 million) to shareholders through a special dividend of 6.25
pence a share. The move comes as the company reported an increase
in net profit to GBP466 million on higher sales for the year.
Standard Chartered PLC shares climbed 5.1% as investors appeared
to embrace the Asia-focused bank's plan to conserve capital after a
37% drop in 2014 net profit to $2.51 billion. The company said it
would cut $25 billion to $30 billion in risk-weighted assets from
its balance sheet in the next two years, among other moves. But the
bank opted not to reduce its yearly dividend, saying that will
remain at 86 cents a share.
Mining shares, however, were hit hard on Wednesday, with the
downward moves paced by Fresnillo as its shares sank 8.5%. The
worst session for the shares since December 2013 was ignited after
the gold and silver miner reported a 22% decline
(http://www.marketwatch.com/story/fresnillo-net-profit-slumps-on-lower-metals-prices-2015-03-04)
in 2014 earnings before interest, taxes, depreciation and
amortization, or EBITDA, to $567 million. Analysts polled by
FactSet had been looking for EBITDA of $610 million. Revenue also
fell, by 12%, to $1.41 billion.
Other mining stocks were also under pressure as metals prices
dropped across the board
(http://www.marketwatch.com/storyno-meta-for-guid), with Glencore
PLC (GLCNF) down 2.7%, adding to its 3.1% decline in the previous
session. Rio Tinto PLC (RIO) shares were off 2%, Anglo American PLC
fell 3.1%, and Antofagasta PLC moved 1.9% lower. BHP Billiton PLC
(BHP) declined 1.6%.
Mining and energy shares have a more than 20% weighting on the
FTSE 100, and recent share-price declines have contributed in
holding the FTSE 100 back from reaching a fresh record high after
the index twice last week marked its best closing levels since
December 1999. The benchmark on Tuesday
(http://www.marketwatch.com/story/ftse-100-pushes-to-record-high-but-glencore-barclays-fall-2015-03-03)
dropped 0.7%.
Meanwhile, the pound (GBPUSD) slipped to $1.5272 after Markit
and CIPS said their U.K. services PMI came in at 56.7 in February.
The reading missed expectations of 57.5 from analysts in a FactSet
survey. Ahead of the report, sterling traded at $1.5357, and at
$1.5361 late Tuesday in New York.
"Notwithstanding the small slide, the index still points to
strong growth. The correction appears normal given the sharp rise
in January," said Charalambos Pissouros, senior technical analyst
at IronFX Global, in a note. "Strong growth, rapid employment gains
and accelerating core inflation confirm the improving momentum of
the U.K. economy."
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
