Hanson was a beneficiary of renewed sector consolidation hopes, while the natural resources stocks gained in tandem with commodity prices. But the weak dollar, disappointing results from Kingfisher and a broker downgrade of Northern Rock still left the wider market struggling.
The FTSE 100 index closed down 35.6 to 6048.8, its seventh decline in eight days, having peaked at 6108.9 in early afternoon. The fall came after data showed business
activity in the Chicago area contracted in November for the first time in over three years.
An overview of world markets
Hanson was up 3.5p to 729p on vague bid speculation after Rinker, the Australian aggregates group, rejected a $12 billion offer approach from Mexico’s Cemex.
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Rinker said the offer was “far too low” and suggested a price tag almost 40 per cent higher. There has been talk of late that Cemex could move for Hanson instead, or that Hanson could bulk up by merging with Rinker. In the backdrop, there was also gossip that that Lafarge could make an offer for French peer Saint Gobain.
Among the fallers, Northern Rock ran back 17p to £11.35 after Credit Suisse downgraded the mortgage bank to “underperform” from “neutral”. It worried that a declining UK mortgage market next year could hit profit margins across the industry.
Kingfisher was worst performer, down 5.25p to 243p as its third quarter earnings were overshadowed by a slower than expected recovery for B&Q, its UK arm.
Miners dominated the FTSE 100 leaderboard as the weaker dollar and yesterday’s economic data combined to lift commodity prices. An upward revision to US gross domestic product helped ease concerns that America’s economy has stalled, while better-than-expected industrial production numbers from Japan vindicated its central bank’s increasing hawkishness.
Lonmin, the platinum miner, was top sector performer with a gain of 75p to £30.70, while Antofagasta was ahead 10.5p to 479.5 and Rio Tinto gained 21p to £27.15.
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Meanwhile, Cairn took on 8p to £20.70 as Credit Suisse stuck to “outperform” advice with a £22 target. The Swiss broker told clients that next month’s floation of Cairn’s Indian business implies a value of £26.74 for the group as a whole.
On the second line, PartyGaming jumped 1.5p to 28p after interim results from rival SportingBet provided reassurance that European gamer growth remained on track even after US customers had been cut out. Sportingbet itself eased 0.25p to 40.75p.
Defence group QinetiQ was also in demand, up 12.5p at 186.75p after reporting an 18.8 per cent increase in first half profit before tax and restructuring costs. A confident coulook statement encouraged Cazenove to raise its recommendation to “outperform” from “in-line”.
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