Friday, 8 August - 4pm update

Falling commodity prices may provide a tonic to those worried about inflation, but they came as a bitter pill for mining and oil companies today.
Rising global stockpiles and a rally in the dollar sent the price of copper sinking for the sixth week in a row and sparked a sell-off of the miners. Speculation abounded that some traders were also taking their profits after the recent boost provided by talk of further consolidation in the sector.

In fact, miners made up seven of the top 10 fallers in the Footsie, with Kazakhmys the biggest loser in the top flight. Its shares, which appeared to be closing in on the £20 mark back in May, plummeted 94p to 1240p. Meanwhile Antofagasta, the owner of copper mines in Chile, reversed much of this week's gains to trade down 30p at 536½p. Rivals were also given a kicking, with Vedanta 94p lower at 1762p and Xstrata off 128p at 3016p.

Meanwhile oil stocks largely came off the boil, with UK explorer Tullow down 38p to 703p and Cairn 88p cheaper at 2640p.

But there was better news from BG Group, which reported a discovery of light oil in Brazil's Santos Basin. The deep-ocean find protected its shares from retreating too far, losing only 12p to 1094p. Evolution estimated that between 500 million to one billion barrels of black gold could be pumped out of the area, although the group did not give any information on the size of the discovery.

The find boosted mid-cap oil services group Wellstream Holdings, which put on 50p to 1103p. With its shares down 23% in the past month on weakening oil prices, BG's discovery came as a well-timed fillip as Wellstream's products will almost certainly be needed in the Santos Basin.
The FTSE 100 remained directionless, eventually sinking back into the red in thin trading. The benchmark index was down 25.8 points to 5451.7, as a strong showing from travel stocks was outweighed by losses from the heavyweight mining and oil sectors. This followed a dramatic fall on Wall Street overnight, with share prices reversing the gains of the past three sessions. The Dow managed to claw back some of those losses today, rising 76.9 points to 11,508.3.

It seems Arun Sarin may have timed his exit from Vodafone to perfection. The former chief executive handed over the reins to high-flying deputy Vittorio Colao last month, having presided over a boom period for the mobile phone giant. But Vodafone shares slid 0.45p today to 138.9p after it fell out of favour with Goldman Sachs. The City big-hitter, which cut the shares from neutral to buy but maintained its 175p target price, cautioned that Vodafone's first-quarter figures show weaker growth in Europe than expected and highlighted the Spanish business as particularly concerning. Goldman also warned that, amid fears that growth in developing world economies could grind to a halt, its emerging market exposure may prove less of a bonus now than it has in recent years.

Marks & Spencer, up 2p at 285p, may remain largely out of favour in the City, but Northern Foods, the supplier of its ready meals, found a fan today. Goldman advised its clients to snap up the stock, and hiked its price target from 72p to 75p despite the company facing soaring input costs. The broker cut earnings forecasts to reflect the tough pricing environment but says the shares still look cheap. The shares rose 5½p to 60¾p.

News that Swiss luxury goods group Richemont and investment firm Remgro are planning to spin off a combined 27% stake in British American Tobacco proved anything but a lucky strike for the cigarette maker. The move, which resulted in proposals for BAT to take a secondary listing in Johannesburg, ended months of bid speculation and sent its shares plunging 37p to 1839p, as some investors were doubtless encouraged to switch to rival Imperial Tobacco. The slump came despite Charles Stanley reiterating its buy rating on the stock.