By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- Shares of Rio Tinto PLC led the way
lower in London after the departure of the company's top executive
and a $14 billion charge, but the overall market stuck to the flat
line as investors looked toward a big Thursday for earnings out of
the U.S.
The FTSE 100 index was all but flat at 6,104.40, after closing
at 6,103.98, down 0.2%, the prior day.
Mike McCudden, head of derivatives at stockbroker Interactive
Investor, said the biggest test for markets this week remains
Chinese economic data due Friday. Mining stocks, a heavyweight
sector in London's market, are especially sensitive to economic
signals out of China.
"We are however continuing to see profit taking from investors
thanks to the recent rally but as yesterday's performance showed,
with every wave of selling their emerges a new tranche of investors
ready to buy in on the dips," he said in emailed comments.
Economic data out of the U.S., along with more big bank
earnings, will provide another focus for London's investors on
Thursday. U.S. stock market futures were showing mild losses, while
Asia stocks mostly fell.
Shares of Rio Tinto (RIO) dropped more than 2%, pressured after
Tom Albanese exited as chief executive on news that the
Anglo-Australian mining group will book a $14 billion impairment
charge for its aluminum assets and well coal assets in
Mozambique.
Also in the mining sector, shares of BHP Billiton PLC (BHP) fell
over 1%, while Xstrata PLC shed 2.5%. Shares of Glencore
International PLC gave up 2.3%.
On the upside, shares of Associated British Foods PLC jumped
5.2%. The diversified food, ingredients and retail company reported
revenue for the first 16 weeks was 10% ahead of last year, adding
that it now expects to make more progress in full-year adjusted
operating profit.
Also higher, U.K. banks gained across the board in the wake of
some upbeat results in the U.S. on Wednesday. Notable gainers
included Barclays PLC (BCS), shares of which rose 1%, and Royal
Bank of Scotland Group PLC (RBS) , up 1.2%.
Deutsche Bank released a positive note on the sector Thursday,
where analysts said they're turning more cautiously optimistic on
the trend for provisions for payment protection insurance. Many
U.K. banks have had to take provisions for the misselling of such
insurance
"Though we would not be surprised to see 'top-ups' to provision
levels in 4Q12 results, we think banks already hold significant
capacity for future repayments at current claim rates, and that
recent redress and search volumes suggest claims may be slowing,"
said the analysts in a note.
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