By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- Mining firms moved firmly higher on
Thursday after on upbeat analyst call on the sector, while
Associated British Foods PLC dropped after a sales update.
Overall, the FTSE 100 index slipped 0.1% to close at 6,815.42,
snapping a four-day winning streak.
Miners posted some of the biggest gains after Citigroup moved
its 12-month stance on the sector to bullish from neutral, marking
the first upbeat call in three years. Within the industry, Citi
said it prefers BHP Billiton PLC (BHP) , up 3.8%, Rio Tinto PLC
(RIO), 2.5% higher, and Glencore Xstrata PLC (GLCNF), rising 2.4%.
Metals prices were mostly higher.
"While we remain concerned about the potential long-term
structural demand story for commodities in China, and we are
cognizant of a potential seasonal slowdown in the first quarter of
this year, our move to bullish reflects better bottom-up
fundamentals, particularly from the major miners," the Citi
analysts said.
"We would rather be too early than too late in making this
call," they added.
Also on the rise, United Utilities Group PLC climbed 4.6% after
Morgan Stanley lifted the firm to overweight from equal weight.
On a more downbeat note, shares of Associated British Foods PLC
lost 2.6% after the food and retail firm said its budget clothing
chain Primark posted strong sales around Christmas, but that its
sugar business was weaker than expected.
Outside the main index in London, shares of Premier Oil PLC slid
6.5% after the oil exploration and production company said output
in 2013 was in the middle of its guidance.
Argos and Homebase owner Home Retail Group PLC gained 1.5% after
saying it expects full-year adjusted earnings to be at the top end
of market expectations after a good trading period for both
units.
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