Late afternoon commodity rise lifts FTSE index - London Report

COMMODITY stocks in the FTSE recovered well yesterday afternoon, from falling sharply earlier in the session because of concerns about economic growth in China, to drag the blue-chip index up.

The FTSE 100 index closed 0.28 per cent higher at 6,721.51 points after a choppy session, which saw the index rising as high as 6,738.95 and falling to 6,693.80.

“Miners turned late in the session to help the FTSE end higher. They have fallen a fair bit and some consolidation has helped them to turn around,” Securequity trader Jawaid Afsar, said. “However there is potential for miners to fall again as concerns about China’s economic outlook haunts the sector.”

The UK mining index fell more than one per cent earlier in the day after data showed growth in China’s investment, retail sales and factory output all missed forecasts in January and February. However, the mining index bounced back later to end 0.1 per cent higher.

Traders said the broader stock market also got some support after the National Institute of Economic and Social Research said Britain’s economy probably grew by 0.6 per cent in the three months to February, the same pace as in the three months to January.

Among the big movers, mid-cap N Brown fell 17 per cent after the British online and catalogue-based retailer of plus-size apparel cut its full-year profit forecast for the second time.

“N Brown blamed a challenging autumn for lowering its full year profit expectations. However, its slowdown may raise questions about renewed competition from established clothing retailers as they move into more multi-channel offerings,” said Lewis Sturdy, a dealer at London Capital Group.

Shares in another mid-cap company, Cairn Energy, fell 15.5 per cent after filing a dispute notice against the Indian income tax department over a $1.6bn (£1.07bn) tax claim.

“The timing of the tax assessment (the same day as results), the significant amount...and the fact it seems to fly in the face of commentary surrounding both Cairn’s specific case and the broader retrospective tax narrative make this situation a new and material escalation of the tax dispute,” analysts at Jefferies said in a note.

They downgraded the stock to “hold” from “buy” and cut their target price.

However, Domino Printing Sciences, surged 30.5 per cent after the board of the company, which makes barcode printers, accepted a £1.03bn takeover offer from Japan’s Brother Industries.

Industry peer Xaar arose 3.01 per cent while another, Oxford Instruments dipped 0.18 per cent, at the close yesterday.