Newspaper article The Evening Standard (London, England)

Gloomy for the Miners as Morgan Urges Caution

Newspaper article The Evening Standard (London, England)

Gloomy for the Miners as Morgan Urges Caution

Article excerpt


MINING shares may finally be losing their gleam, says Morgan Stanley,which today advised clients to take their profits and quit the sector.

European metals and mining analyst Wiktor Bielski, who has been among theminers biggest fans, called for a correction of between 10% and 20% to theshares in the short term although he believes they could still prove a good betover the long haul.

With metal prices retreating in London trading, the note was the final strawthat sent shares across the sector plummeting after yesterdays record run.

Eurasian Natural Resources was the biggest loser in the Footsie 100, dropping125p to 1410p. BHP Billiton shed 146p to 2050p, Rio Tinto slumped 440p to6638p, Antofagasta was 48p lower at 749p, copper producer Xstrata 254p cheaperat 4166p and Kazakhmys lost 126p to trade at 1817p.

Even Anglo American, which had praise heaped on it by Credit Suisse, sank 219pto 3461p. The broker has raised its target price for Anglo from 3300p to 4500pon the expectation copper and platinum prices will continue to rise.

The FTSE 100 index plunged 139.3 points to 6237.2. The picture on the otherside of the Atlantic was equally bleak, with the Dow down 144.3 points at12,883.9.

But in a major reversal of fortunes in London, it was banking shares thatprovided some cheer for investors. Alliance & Leicester topped the Footsieleaderboard, surging 10 1/4p to 440 1/2p. HBOS and Bradford & Bingley, whichhave both gone cap in hand to shareholders in recent weeks, also rose. HBOS wasup 8 1/4p at 470 3/4p and B&B put on 2p to 114p.

But brokers remained wary of the sector, with UBS cutting Barclays target pricefrom 500p to 520p. Its shares drifted down 7p to 406p.

Despite breaching the [pounds sterling]1 billion profits barrier, Marks & Spencer failed to winover the market with its results. …

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