LONDON MARKETS: FTSE 100 Moves Higher As Miners Gain; U.K. Inflation Flat

By Carla Mozee, MarketWatch

Pound recovers after flirting with $1.45

LONDON (MarketWatch) -- U.K. stocks finished higher Tuesday, aided by gains for mining shares.

The FTSE 100 vacillated between minor gains and losses during the session, but eventually closed up 0.2% at 7,075.26.

The key mining group found some relief after being driven lower in the previous session in the wake of downgrades of the iron-ore sector and weak data from China, a key buyer of metals.

Shares of BHP Billiton PLC (BHP) and Rio Tinto PLC (RIO) , , the largest iron-ore producers, climbed 3.1% and 2.8%, respectively. The companies were downgraded by Citigroup on Monday, and Standard & Poor's put their credit ratings on watch for possible downgrade

But decliners included Aberdeen Asset Management PLC and Associated British Foods PLC .

Aberdeen shares dropped 2.5% after RBC Capital Markets cut the company to underperform from sector perform, lowered its price target by 4% to GBP4.55 and reduced per-share earnings forecasts. RBC said the moves come as they "expect an acceleration in equity net outflows," in the three months to March. They estimated those outflows have more than doubled to GBP1.9 billion from GBP900 million. Aberdeen's fiscal 2015 results are due May 5.

Associated British Foods fell 0.4% as Jefferies said it's cutting its mid-term estimates on the company by 5% to 8% to reflect "further currency headwinds" since its late January downgrades. It also cut ABF's price target to GBP28.50 from GBP29.

Oil heavyweight BP PLC's (BP) rating at Citigroup was cut to neutral from buy, but shares finished fractionally lower, coming off their worst levels of the day.

The pound (GBPUSD) had hit an intraday low of $1.4603 after the Office for National Statistics said consumer prices in the U.K. were flat in March (http://www.marketwatch.com/story/uk-consumer-prices-stay-flat-in-march-2015-04-14-4485508) from the year-earlier period. The inflation rate came in unchanged at nil from February.

"Although this was widely expected, other measures of inflation were mostly weaker than anticipated, causing the pound to slide as speculators pushed their Bank of England rate hike expectations further out," wrote Fawad Razaqzada, technical analyst at Forex.com, in a note. The core CPI was just 1%, the lowest level since July 2006.

But he noted the pound came off session lows ahead of the U.S. retail sales report for March. The pound then bounced up to $1.4776 after that report showed a smaller-than-anticipated rise in sales (http://www.marketwatch.com/story/retail-sales-rebound-after-three-weak-months-2015-04-14).

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