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Home Markets Markets FTSE 100: Randgold Resources, Xstrata maintain strength
FTSE 100: Randgold Resources, Xstrata maintain strength PDF Print E-mail
Written by Sam Coventry   
Monday, 08 February 2010 14:11
While the FTSE 100 index falters the miners maintain strength.  


The FTSE 100 (INDEXFTSE:.FTSE) is higher 0.08% at 5,064.29 points.

The FTSE 100 index opened strongly this morning, bouncing back more than 1% after some encouraging signs from the mining sector.

Randgold Resources Limited (LON:RRS) is still in focus with its 5% worth of gains which it has managed to maintain throughout the day.

Improving risk sentiment over the course of the weekend has lead us to where we are with regards to improved commodity prices.

Randgold Resources said that its full-year profit rose 79%, climbing from $47 million to $84.3 million, beating expectations, and that the company is planning to raise the full-year dividend by 30%. Chief Executive Mark Bristow said that new projects should provide a boost to its gold reserves and that he expects updated figures due in March to confirm that reserves have grown more than 60%.

As its name suggests Randgold Resources is particularly receptive to gold prices which have firmed in line with improved risk sentiment.

Xstrata (LON:XTA) climbed more than 3% to 985p after announcing that it is restoring its dividend payments, in the belief that the outlook for commodities is promising.

"Robust economic growth and demand for commodities from industrialising nations is likely to continue, with many forecasters anticipating Chinese GDP growth of around 9% in 2010," said Mick Davis, Chief executive, in the preliminary full-year results for 2009 which were released today.

"The board’s increased confidence in the medium-term outlook for commodities and Xstrata's encouraging prospects and financial position have enabled the resumption of dividend payments."

The company posted an expected 41% drop in profit for 2009, but the market responded positively to the dividend news and the positive tone of the statement.

Anglo American, Rio Tinto and Kazakhmys all up around 3%.

Elsewhere, International Power gained over 2%, rising to 322p following a story reported in the Independent on Sunday that the French company GDF Suez is considering a renewed bid, following a failed attempt at a tie-up last month.

Such a deal would provide GDF Suez with a way into the UK energy market, where it currently only has limited operations. The Independent cited an unnamed source that is 'close' to GDF, who claims that GDF may return with an improved bid that could include a cash offer for shareholders.

With no major economic releases today it will be interesting to see how the US stock market opens, to gauge whether the recent share price falls are, in fact, a case of the market being oversold, or if investors will continue to remain pessimistic about economic prospects in the absence of further economic stimulus. It could be worth keeping an eye on Home Depot this afternoon: analysts at Goldman Sachs have raised their price target on the stock by $1 to $33.
Last Updated ( Monday, 08 February 2010 14:14 )