Banks and miners attract retail investors
Angus Rigby, Chief Executive Officer, TD Waterhouse comments: "Buying continues to be the strategy of choice with the top ten buys 17% ahead of the sells this week. Banks still dominate the tables accounting for 60% and 68% of the most popular buys and sells, respectively. Mining sector stocks have also been a popular choice, taking up five spots on the table and accounting for almost a third (32%) of top ten buys, suggesting there was something besides Lloyds £13.5bn Rights Issue affecting retail investor trading strategies over the week.
"Indeed, it was a black Monday (7 Dec) for the banks and miners and they dragged the leading London index down 53.3 points to 5,269.06. Banks had come under pressure on investors' concerns about a windfall tax, which - as it eventually turned out - will not be imposed according to the Chancellor's Pre-Budget Report. But the fallers among the banks on Monday were Royal Bank of Scotland, which fell 0.83p to 33.8p, while Barclays slipped 6.9p at 296.6p and Lloyds dropped 0.93p to 55.07p.
"Monday also saw mining groups suffer a drop in commodity prices after the dollar strengthened, potentially explaining why mining stocks occupied five places in the buys table this week. The top fallers that day included Rio Tinto, which lost 48p to £30.77 as it sealed a $116bn iron ore joint venture with rival BHP Billiton (also down 14.5p at £18.76 the same day). This announcement seems to have put to bed speculation that Rio Tinto was looking to extricate itself from the initial deal.
"Gold miners were also a popular choice this week thanks to continued fluctuations in the price of the underlying commodity. Monday also saw gold plunge 2% to $1,135.8, causing RandGold Resources to lose 135p and reach £48.38 the same day.
"Meanwhile, London-listed gold miner Petropavlovsk re-entered the tables this week after a short absence and overtook RandGold. Petropavlovsk - which has seen its share price triple in 2009, bolstered by record gold prices - is now on the cusp of joining the FTSE 100 index of UK companies 15 years after it was founded. On Wednesday, the FTSE Group announced changes to its quarterly review, which will now allow companies to join the FTSE 100 Index if they rank among the top 90 by full market capitalization (and be deleted if they fall to 111th or lower). It will be interesting to see where Petropavlovsk lies in the rankings when the changes take effect after market close on December 18th."