Miners Keep London Higher

Ivaylo
02 Oct, 2006
New York City

PartyGaming weighed down on the market on reports it is considering suspending its US business but miners are having a good day led by Anglo-American and BHP Billiton. Utilities are also riding high after water stock AWG announced it has agreed a with Osprey, but said it has received a number of other approaches. Scottish Power is performing well and current trading is expected to be ahead of expectations. The FTSE 100 is up 0.07% at 5,965.10 at 2pm GMT.

[R]9:30AM Upbeat mining stocks and utilities help the FTSE find its feet.[/R]
The FTSE 100 in London is up 0.07% at 5,965.10 at 2 pm GMT on Monday.

Merger Activity

Anglian Water Group has been bought by a consortium headed by 3i. South East Water, another Bristish utility has been purchased by Hastings Fund Management of Australia.

Takeover speculation is also lifting British Airways after press reports that two Middle Eastern groups were mulling an offer earlier this year. Emirates maintained that it has no intention of bidding.

Advancers

Water companies were amongst the strongest gainers in the FTSE 100 following news that mid-cap water firm AWG said it had received new bid approaches after agreeing a 2.2 billion pound offer from Osprey. AWG advanced 4.60%. Kelda Group gained 2.8%, while competitor Severn Trent gained 2.5% and United Utilities added 1.2%. Scottish Power gained 2% after it said that all its operations were performing well and that trading was expected to be ahead of expectations.

Shares in mining company Anglo American were up 2.3% on speculation that fellow miner Rio Tinto is to make an offer for the firm. Rio Tinto went up 1%. Among the leading gainers in the FTSE 100, sugar and sweetener maker Tate & Lyle went up 2.8% after it said it had started its year strongly and in line with its expectations, adding profits in its first five months were comfortably ahead of its previous year.

British Airways shares rose over 1.4% following a newspaper report that two Middle Eastern groups considered bidding for the airline earlier this year. In the retail sector, shares in Tesco went up 1.6% following news that it will sell software from AIM-listed Formjet under the Tesco Software brand.

Decliners

PartyGaming led the decliners, plunging 58%, following a U.S. clampdown on the sector while smaller rival Sportingbet nose-dived 58%. Prudential fell 1.7%. The company, whose shares jumped on Friday on takeover talk, is examining its options for its UK operations.

Next lost 0.1% after WestLB downgraded the retailer. Marks & Spencer dropped 1% after the brokerage raised its target but maintained its rating.

Other news

Manufactoring activity unexpectedly rose in September, supported by a rebound in export orders and an acceleration in factory output at its fastest rate in more than two years. The CIPS/RBS Manufacturing Purchasing Managers Index advanced to 54.4 in September from a downwardly revised 53.0 in August.