The FTSE 100 Index struggled to extend Monday’s record-breaking rise today as a major mining deal brought the bounce back to a halt.
Profit taking and a lacklustre start to trading on Wall Street added to the more subdued trading, with the FTSE closing up 18.3 points at 4171.3.
BHP Billiton’s withdrawal of its bid for fellow miner Rio Tinto put the top tier on the back foot from early trade, dampening spirits after yesterday’s near 10% rise – the biggest in the FTSE 100’s 24-year history.
The news also sent Rio’s shares tumbling 37% or 900p to 1550p, while several other miners fell amid general profit-taking.
Lonmin and Antofagasta were off 16p to 838.5p and 29.5p to 401.25p respectively, with the sector accounting for many of the Footsie’s top fallers.
But relief at BHP Billiton’s withdrawal propelled the firm to close to the top of the risers’ board as it said the Rio tie-up now posed “unacceptable” risks to shareholders. BHP rose 71p to 1051p, a rise of more than 7%.
Banks also had a good session in the wake of recent shareholder approval for public and private bail-out plans.
Barclays – whose Middle East fundraising was approved yesterday – added 20.5p to 167p. Lloyds TSB meanwhile gained 9% or 13.3p to 160.9p and Royal Bank of Scotland cheered 2.8p to 53.6p.
Asian-facing Standard Chartered, which announced plans to raise £1.8bn (€2.13bn) yesterday, was the best performer on the FTSE 100 despite Credit Suisse cutting its target price on the bank. Standard added 115p to 840p, 16%.
But telecoms giant BT was heading the other way after Merrill Lynch downgraded the firm, warning it was vulnerable to slowing corporate and consumer spending. Shares lost 4.8p to 130.5p.
Lambert & Butler and Davidoff maker Imperial Tobacco was also on the fallers board despite posting a 30% rise in annual underlying pre-tax profits to £1.6bn (€1.89bn).
Shares fell 107p to 1470p.
In other corporate news, Durex and Scholl firm SSL International rose 3% or 13.5p to 434.25p after half-year profits jumped 46%.
Shares in Clinton Cards were under pressure after the greetings card retailer reported a deterioration in sales at its main Clinton business. Shares fell by as much as 20% before recovering to show a 9% decline, off 1p at 10.5p.
H Samuel and Ernest Jones jeweller Signet also shed 14p to 555p as the retailer reported a loss before tax of $23.6m (€18.15bn) in the third quarter. The firm said UK sales in the last three weeks of the quarter had fallen 8% in “very challenging” conditions.
The biggest FTSE risers were Standard Chartered up 115p at 840p, Barclays ahead by 20.5p at 167p, Icap up 29.5p at 290p and Schroders up 62p at 721p.
The biggest fallers were Rio Tinto down 900p at 1550p, Friends Provident off 7.2p at 69p, Centrica down 19.75p at 254.25p, Antofagasta down 29.5p at 401.25p.