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Markets Rise Despite Rio Tinto's Downward Pull

THURSDAY MARKET UPDATE: Well-received quarterly numbers from Associated British Foods helped push the FTSE 100 forward, even as investors bid down shares in the mining giant Rio Tinto

Alanna Petroff 17 January, 2013 | 6:35PM

The FTSE 100 and FTSE 250 indices regained some market momentum on Thursday, with shares in Associated British Foods (ABF) helping to lead the way forward.

The FTSE 100 popped up by 28 points, or 0.5%, to close at 6,132. The FTSE 250 climbed up by 84 points, or 0.7%, to close at 12,484.

Investors bid up the shares of Associated British Foods after the company reported that overall sales were 10% higher compared to last year. Those results were driven by a 25% jump in revenue at its Primark stores. 

"Sales at Primark were above expectations, 25% ahead of the same period last year and 27% ahead at constant currency," stated the company in its interim management statement. "This was driven by very strong like-for-like sales growth, a substantial increase in retail selling space and superior sales densities in the larger new stores. Like-for-like growth benefited from comparison with weak sales during the unseasonably warm autumn of 2011 and good trading over the Christmas period."

Meanwhile, on the other end of the spectrum, shares in Rio Tinto (RIO) took a 0.5% hit after the company's CEO, Tom Albanese, was booted from his position. The announcement came as the company revealed a $14 billion writedown. 

The bulk of the $14 billion non-cash impairment charge is related to the miner's acquisition of Alcan in 2007. The overall writedown also includes a $3 billion charge related to a recent coal acquisition in Mozambique.

"The Rio Tinto Board fully acknowledges that a write-down of this scale in relation to the relatively recent Mozambique acquisition is unacceptable," stated Rio Tinto chairman Jan du Plessis in a press release. "We are also deeply disappointed to have to take a further substantial write-down in our aluminium businesses, albeit in an industry that continues to experience significant adverse changes globally."

To learn more about Morningstar's take on Rio Tinto, check out the article "Stock Spotlight: Rio Tinto".

To see the other risers and fallers on the FTSE 100, check out Morningstar's Heat Map.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article
Security NamePriceChange (%)Morningstar
Rating
Associated British Foods PLC2,720.00 GBX0.00-
Rio Tinto PLC3,056.50 GBX-1.07
About Author Alanna Petroff

Alanna Petroff  is a financial journalist with Morningstar UK.