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Surging Old Mutual and miners can't lift flagging FTSE

FTSE 100 edges lower despite surge in shares of insurer Old Mutual on break-up reports, while miners notch up latest stage of impressive rally.

 
Surging Old Mutual and miners can't lift flagging FTSE

Update: The FTSE 100 has edged lower despite a surge in the shares of Old Mutual on reports the insurer is planning a multi-million pound break-up.

Old Mutual (OML) jumped 7.2% to 192.6p on reports the group had received a takeover approach from private equity firms and was planning a split into four businesses.

'Old Mutual shares are sharply higher this morning on weekend speculation that it could be broken up,' said Mike van Dulken, head of research at Accendo Markets. 'While it says that a decision has "yet to be made", investors will be hoping that it's a case of 2+2=5, with the individual assets being worth more on a stand-alone basis that whilst held together.'

Eamonn Flanagan, analyst at Shore Capital, added that a break-up of the business could add £1 billion of value to the business. 'We believe that a disposal or demerger of [wealth management business] Old Mutual Wealth is a distinct possibility,' he said. 'The interaction with the South African life and banking operations is pretty limited and, indeed, probably introduces the conglomerate discount that the stock has traded on for quite a while.'

Miners were also in the ascendancy, continuing on the strong rally from mid-January lows on hopes of further stimulus from top metals consumer China. Antofagasta (ANTO) rose 7.7% to 593p, Glencore (GLEN) was up 7.2% at 171.5p, Anglo American (AAL) rose 5.4% to 624.5p and Rio Tinto (RIO) added 5.3% to £22.42.

But that wasn't enough to lift the faltering FTSE 100, which dipped 21 points, or 0.3%, to 6,178.

Financial advice group St James's Place (SJP) was another riser, up 3.1% at 885.5p as analysts at Bernstein upped their target price on the stock.

A jump in the oil price, up 2.9% at $39.84, helped Shell (RDSb) claw back some earlier losses to close 12p down at £16.73, while BP (BP) dropped 0.8% to 365p.

Among small cap stocks, Premier Oil (PMO) was among the big risers, up 13.4% at 50.8p, on reports the company is in talks to merge parts of its business with other North Sea oil companies.

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