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FTSE falters on Greek debt deal worries but Randgold rises after profits surge

Gold miner reports 259% jump in full year profits, but markets nervous as Greek talks continue

With leading shares edging lower as confusion and disagreement over the Greek bailout continues, one stock heading higher is Randgold Resources.

The gold mining group has jumped 215p to £76.15 – up almost 3% – after it said full year profits rose 259% to 3.3m thanks to increased production at its Ivory Coast and Mali projects. Profits for the fourth quarter saw an even greater increase, up 323%. It has doubled the dividend to shareholders following the figures. The company said the result was even more significant given it had carried out major expansion programmes and faced disruption at some of its sites during the year. Numis analyst Andy Davidson said:

Overall a positive operational and earnings update and a good hike in the divi which should keep everyone happy. [The stock] will no doubt remain expensive despite some likely upward revision to our forecasts, but this update shows why it trades at a premium to its peers.

Overall the FTSE 100 is down 33.21 points at 5867.86 as Greek party leaders continue their discussions on the austerity measures needed to receive the next tranche of bailout money. Kathleen Brooks at said:

In the absence of economic data today headline risk from Greece will dominate. Watch out for anything that smacks of political brinkmanship that could put the next tranche of bailout funds in jeopardy as this could cause a knee-jerk sell off in risk. In contrast an agreement could see markets rebound.

Back with the miners, Glencore is down 15.6p at 466.95p and its proposed merger target Xstrata is 32p lower at £12.51, following reports Glencore might have to pay more and suggestions the deal could face regulatory hurdles.

Tesco has dipped 3.8p to 322.85p on talk its launch of current accounts through its banking business has been pushed back to next year. But Espirito Santo said Tesco had other problems to occupy the company:

Following December’s profit warning and announcement that around £400m of UK margin will be invested in the customer offer, investors are much more concerned about trends and recovery strategies for the core UK grocery business.

Admiral gave up some of the gains it made on Friday, falling 43p to 995p. Andy Hughes at Exane BNP Paribas said:

Admiral’s share price reacted strongly on Friday (up 7.9%) to the announcement that the reinsurance arrangements had been extended to 2014 on current terms.

This prompted some commentators to say that Admiral’s reserving issues were in the past and that the reinsurers had audited the level of reserves. We see a key difference between the reinsurance and the shareholder risk. We do not believe the reinsurance structures will be effective in capital terms under Solvency II and therefore the extension is rather irrelevant.

We expect that Admiral’s market share is in decline. This could lead to a decline in vehicle count in the fourth quarter. © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds