March 30, 2017 / 9:31 AM / 8 months ago

FTSE ends little changed, support from mining stocks

LONDON (Reuters) - Britain's FTSE 100 .FTSE ended little changed on Thursday with mining stocks providing the most support, while stocks trading without their dividends weighed on the market.

A worker shelters from the rain under a Union Flag umbrella as he passes the London Stock Exchange in London, Britain, October 1, 2008. REUTERS/Toby Melville/File Photo

The benchmark index edged down 0.06 percent as several heavyweight stocks went ex-div: Old Mutual (OML.L), Schroders (SDR.L), Smith & Nephew (SN.L), and Prudential (PRU.L) fell between 1.2 percent and 1.7 percent.

However, the mining sector - boosted by strong metals prices - provided support. Glencore (GLEN.L), Rio Tinto (RIO.L) and Anglo American (AAL.L) gained between 1 percent and 2.3 percent.

Also dragging on the FTSE, SSE (SSE.L) shares fell 1.5 percent after the energy supplier said dividend cover for its 2017/18 financial year would be at the lower end of guidance.

The London Stock Exchange (LSE.L), fresh from disappointment over a planned merger with Deutsche Boerse (DB1Gn.DE) being scuppered by the EU antitrust regulator, was up 0.8 percent.

“While a takeover of LSEG is not central to our positive thesis, we acknowledge that industry consolidation and the takeover potential should provide valuation support and is helpful to our positive thesis,” RBC analysts said in a note, resuming coverage of the stock with an “outperform” rating.

Among other gainers, Ashtead (AHT.L) rose 2.4 percent after Liberum initiated coverage of the construction equipment rental company with a “buy”, saying rental penetration in the U.S. market would drive growth for its North American segment, which contributes 86 percent of revenue.

“The upside potential from increased rental penetration in the U.S. market is yet to be fully reflected in Ashtead’s share price, in our view,” Liberum analysts said.

Among standout mid-cap movers, Petra Diamonds (PDL.L) surged 9.7 percent after it refinanced its debt, while RPC (RPC.L) slumped 7.7 percent with one trader saying a lack of detail over its guidance disappointed investors.

Small-cap Carr’s Group (CARRC.L) dropped 17 percent, its worst losses for 16 years after the agriculture and engineering firm cut its expectations for full-year performance.

Analysts said the market was waiting for Britain to set out its plan for converting EU laws into domestic law in a White Paper later on Thursday, and EU Council President Donald Tusk to give negotiating guidelines to the 27 member states by Friday.

Investors called for a renewed focus on fundamentals ahead of the long Brexit process.

“We have got a minimum of two years, and realistically much longer, to figure out how it all falls into place,” said Ian Williams, economics and strategy analyst at Peel Hunt.

“We are in completely uncharted territory, many things can change. So from an equity standpoint all you can do is take a step back and look at your companies, and at the macro picture.”

Additional reporting by Danilo Masoni; Editing by Louise Ireland

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