By Sara Sjolin and Carla Mozee, MarketWatch
LONDON (MarketWatch) -- The U.K.'s FTSE 100 index pared gains
Tuesday, weighed down by mining stocks after a downbeat outlook for
iron-ore prices, but Vodafone Group PLC shares surged on a
well-received earnings report.
The London benchmark was up nearly 3 points at 6,613.89, though
even a small advance would mark the index's fifth straight gain in
a row.
A decline among mining stocks cut into the FTSE 100's gain as
Citi downgraded its view on iron ore prices. It expects an average
price of $74 a metric ton in the first quarter of 2015, then a drop
to $60 a metric ton in the third quarter and "briefly dipping into
the $50s." It foresees annual average prices of $65 a metric ton in
2015 and 2016.
Shares of Anglo American PLC fell 2.4%, Rio Tinto PLC lost 2.1%,
and BHP Billiton PLC fell 1.6%.
There is likely to be "a further deterioration in [Chinese]
steel demand in Q1 on the back of extremely tight credit conditions
in 2Q14 (typically there is a six month lag to steel demand),
slowing of manufacturing export growth, and the government
prioritizing reform over short-term growth," wrote Citi analyst
Ivan Szpakowski in a Tuesday note.
But shares of Vodafone (VOD) kept their position as the
benchmark's top gainer, climbing 6% after the telecoms giant said
performance across its key European markets is showing
improvement.
Among other top performers, shares of Land Securities Group PLC
rose 2.6% after the commercial property company said its adjusted
net asset value rose 11.5% in the first half.
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