Market report: Wednesday close

WAS it a mining expert who coined the phrase 'all that glisters is not gold?' AngloGold Ashanti, part of the giant

Anglo American

Gold prices are quoted in US dollars, now weakening against other major currencies, including the South African rand. AngloGold Ashanti, which produces 57% of its gold outside of South Africa, says this dented revenue and pushed up costs.

The spot US dollar price is down some $15 on the March quarter. 'Volatility, with the price trading a $50 range, was likely to see Anglo-Gold Ashanti's received price somewhat lower than spot,' said a spokesman for the company.

The South African rand is now 17 cents stronger against the dollar during the period, which translates to an increase of around $7 per ounce in the company's dollar-denominated cash costs.

Anglo expects to meet its production target of 5.3m ounces and to be close to its previously indicated targeted cash cost of $254 an ounce.

Anglo American slipped 10p to 1128p and there were also losses in Antofagasta, down 11p at 940 1/2p, and BHP Billiton, 1 1/4p to 478 1/2p.

City investors generally were keeping a low profile awaiting tonight's move by the Federal Reserve on US interest rates. A quarter-point rise to 1.25% is already pencilled in. Anything bigger would undermine sentiment, although Wall Street traders acknowledge that something must be done to counter growing inflation. The Dow Jones industrial average fell 27.05 to 10,386.38 and the Nasdaq composite index dropped 0.52 to 2,034.41 in early trading.

In London, the FTSE 100 index fell 48.3 to 4464.1. It had to contend with a list of big companies going ex-dividend. They included BOC, down 26p at 923p after shelling out 24 1/2p a share to shareholders, and Emap, off 16p at 740p.

Unilever ended unchanged at 541p despite heavy trading following a two-day 'touch and feel' presentation for brokers in the Netherlands by the new chairman Patrick Cescau. A line of 15m shares went through at 544p.

BT rose 1 3/4p to 198 1/2p after turning up the heat in the battle for internet broadband market share. It has decided to slash the price for its consumer broadband service by 10%.

British Airways was unable to extend yesterday's gains after its own broker Merrill Lynch repeated its buy recommendation. The shares fell 3 1/4p to 275 1/2p.

BAT fell 13p to 854 1/2p, Gallaher 16p to 666 1/2p and Imperial Tobacco 37p to 1188p on learning the Labour Party planned to include a ban on smoking in pubs, bars and restaurants in its next manifesto. Gallaher has seen a significant drop in sales in Ireland since it introduced a ban.

Exel, which is bidding for rival logistics outfit Tibbett & Britten (down 1 1/4p at 675p), rose 9 1/2p at 767p.

The decision by Laurel Pub Company to back off from making a counterbid for pubs and wine bars chain Yates left Commerzbank nursing a sizeable loss on its investment. It snapped up six million Yates shares last week at 142p, presumably banking on someone else making a move.

But Laurel's decision to leave the way clear saw Yates fall 2 1/2p to 140 1/2p and Commerzbank with a paper loss of about £60,000. It also means private equity specialist GI Capital has the only bid on the table, worth 140p a share.

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