FTSE wavers as ‘Glenstrata’ deal weighs on miners

Britain’s FTSE stumbled as miners dragged down the index and investors awaited a Greek debt deal.  

The benchmark UK index of blue-chip shares slipped 0.03%, or two points, to 5,890 and the Mid-250 index fell back 0.39%, or 44 points, to 11,194.

Objections to the ‘Glenstrata’ deal have been raised by investors Standard Life and Schroders, which own 3.6% of Xstrata each.  

Xstrata (XTA.L) shed 61.5p, or 4.9%, to £12.32 and Glencore (GLEN.L) fell 17.5p, or 3.8%, to 459p as the deal was said to be unfair to Xstrata owners.

Other miners also lost out in Tuesday trade: Randgold Resources (RRS.L) dropped 270p, or 3.6%, to £72.95; Eurasian (ENRC.L) fell 18.5p, or 2.6%, to 703p; Kazakhmys (KAZ.L) shed 30p, or 2.5%, to £11.60.

Greek deal postponed

Speculation that negotiations on Greek finance reforms will be concluded tomorrow did the rounds, but investor confidence about a possible deal remained low.

Michael Hewson, senior market analyst at CMC Markets, said: ‘This is likely to be a case of "once bitten, thrice shy" with respect to talk of imminent deals out of Greece, hence the markets' reticence to get ahead of itself given that we have been disappointed so many times before.

'Talk from Athens is that the Greek cabinet will meet tomorrow to approve a new package; however that seems beside the point given that the prime minister will need buy in from the opposition parties,’ he said.

Other stock markets in Europe gave mixed results but the mood was low: Germany’s DAX index tipped down 0.12% to 6,757, France's CAC 40 index rose 0.14% to 3,410, and the FTSEurofirst 300 index of top European shares fell back 0.28% to 1,072.

Stateside markets were buoyant as comments from Ben Bernanke, chairman of the Federal Reserve, indicated that further quantitative easing is on the cards.

The Dow Jones Industrial Average pushed 0.18% to 12,868, the Standard & Poor's 500 index strengthened 0.19% to 1,347, and the Nasdaq Composite index gained 0.13% to 2,906.

Sterling added 0.39% against the dollar to $1.588, and fell back 0.46% against the euro to €1.199.