Market report: Billiton plummets on Brazil tragedy

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Shares of BHP Billiton crashed to the bottom of the blue-chip index after a burst dam at one of its iron ore mines in Brazil wreaked havoc on a nearby town.

The tragic incident is reported to have left at least 15 people dead and about 200 homes in Mariana, south-eastern Brazil are thought to have been engulfed by the mudslides.

BHP, which shares ownership of the Samarco mine with Brazilian iron ore giant Vale, said it was “concerned” for the safety of employees and the local community, adding that it was waiting for more details.

Although the extent of the damage caused by the disaster is as yet unclear, the cost will undoubtedly be high for Billiton, whose shares slumped 46.8p or 4.5% to 987.2p. It was a hefty fall, given that the Anglo-Aussie miner’s peers were trading relatively flat.

Anglo American, which is not far behind Glencore as the Footsie’s biggest loser of 2015 after a 7% slump yesterday, was just 1.2p lower at 533.4p, and Rio Tinto, BHP’s closest relative, gained 37p or 1.6% to 2336p.

Traders sat on their hands ahead of the keenly awaited jobs numbers from across the pond, with investors searching for clues about the timing of an interest-rate rise from the world’s largest economy.

Nour Al-Hammoury, chief market strategist at ADS Securities, said: “A good outcome with weaker wages is likely to push December rate-hike estimates to 2016.”

That held the FTSE 100 back from making much progress as it edged down 0.22 points to 6364.68. A strong third-quarter, which saw earnings rise 8.6% to $180.2 million (£119 million), boosted satellite telecoms group Inmarsat by 16.5p to 990p.

The $2.7 billion acquisition by AstraZeneca of Californian biotech firm ZS Pharma failed to impress investors, who baulked at the price the pharmaceutical giant is prepared to cough up. Astra shares fell 27.5p to 4219.5p.

The Footsie group pipped Swiss rival Actelion to the post with the deal which bolsters its drug pipeline, offsetting a wave of patent expirations.

The departure of chief operating officer Michelle Ash from Acacia Mining — the FTSE 250 miner formerly known as African Barrick Gold — barely five months into the role took the shine off the stock. Its shares cascaded 2.6p to 174.9p.

There was a rare piece of good news for the junior oil sector as AIM-listed Pantheon Resources surged 9p or 12% to 82.4p after striking oil sooner than expected at a well in Texas. The share price has doubled over the past week in anticipation of a gusher.

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November 6, 2015 |
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