Market overview: Miners drag FTSE 100 lower

LONDON (ShareCast) – 1630 Close: The FTSE 100 ended 26.78 points lower to 6855.51, dragged down by miners as the price of iron ore declined. Also weighing on stocks was a profit warning from Fenner (LSE: FENR.L – news) . The maker of conveyor belts for the mining industry said pre-tax profit will be up to 15% lower due to weakness in the coal sector and failure to clinch an Australian iron ore contract.

1600: Around two thirds of Russian troops have moved away from the border with Ukraine. FTSE 100 down 27 to 6,845.

1500: The final reading on the Thomson Reuters (Frankfurt: TOC.F – news) /University of Michigan’s US consumer confidence index for May came in at 81.9, down from the previous month’s level of 84.1 but ahead of the preliminary print of 82.5. The consensus estimate had been for a reading of 82.5.

1445: MNI’s regional Chicago business barometre rose by 2.5 points to reach 65.5 in May, versus the prior month’s reading of 63 and the 60 level forecast by the consensus.

1423: Goldman Sachs (NYSE: GS-PB – news) has added Rightmove (LSE: RMV.L – news) to its ‘Conviction buy’ list.

1330: US personal incomes advanced at a 0.3 per cent month-on-month clip in April, as expected. Personal (Other OTC: PRBDF – news) spending dropped by a tenth of a percentage point over the month (consensus: 0.2 per cent).

1213: UK oil group Salamander Energy (Other OTC: SALDF – news) is up nearly 9% on reports that Cia Espanola de Petroleos SAU is looking to buy to company for €700m.

1125: Strategists at Credit Suisse (NYSE: CS – news) today added to their ‘overweight’ position in global equities, in the process lifting their year-end targets on the S&P 500 to 2,020 (from 1,960) and for the FTSE 100 to 7,300 (from 7,100).

1124: RBS (LSE: RBS.L – news) has hired Morgan Stanley (Berlin: DWD.BE – news) to review a possible sale of its Ulster unit, Bloomberg reports.

1005: Smith & Nephew (LSE: SN.L – news) (+1.6% at 1,045p) is extending gains and is now trading nearly 9% higher over the week as bid speculation continues. Stryker (Berlin: SYK.BE – news) , in a statement to the Takeover Panel, was forced to deny reports earlier this week that it was working on a bid for the company. However, its CEO yesterday confirmed that it had been in the early stages of considering a transaction but was not ready to make an offer. UBS (Xetra: UB0BL6 – news) raised its target price for S&N today from 1,000p to 1,100p, saying it sees a one-in-three chance that S&N will be taken over within the next two years.

0927: Conveyor belt maker Fenner is continuing to provide a drag on the FTSE 250, down 12% after its profit warning on the back of weakness in the US coal market. Numis is weighing on the share price after downgrading its rating on the stock from ‘add’ to ‘hold’, saying that the “shares will continue to trade poorly until evidence of a recovery in its end market prevails”. In contrast, Mitchells & Butlers (LSE: MAB.L – news) is rising after Numis upgraded the pubs group from ‘add’ to ‘buy’.

0835: Stocks have started the day slightly lower, despite overnight gains on Wall Street, with miners leading to the downside. To take note of, Bloomberg points out how iron ore futures are headed for their sixth consecutive monthly drop, the longest on record. Acting as a backdrop, the latest Japanese industrial production and retail sales figures, for the month of April, have come in below analysts’ forecasts. Out on the FTSE 250 shares of Fenner are plummeting by 15%. The conveyor belt maker indicated that sentiment in the US coal industry has deteriorated and is showing no prospects for imminent improvement. A raft of Fed speakers and US economic data are scheduled for later on in the afternoon. FTSE 100 down 10 to 6,861.

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