Market Report: Petra Diamonds’ share price falls to lowest mark in five years

Diamonds might be a girl’s best friend but they appear to have lost their appeal with investors, as demonstrated by Petra Diamonds’ share price performance this year.

On Wednesday, it fell to its lowest mark in five years, overtaking Premier Oil as the FTSE 250’s biggest faller of 2015, having lost almost two-thirds of its value this year.

The latest slump, down 10.45p to 70p, came as the company revealed that diamond prices at the first tender of its financial year fell 8.8 per cent compared with last year.

It comes less than a week after Anglo American slashed diamond production at De Beers, its most profitable division.

Brokers were undeterred by the apparent fall in demand and chose instead to focus on Petra’s record first-quarter production.

Investec’s analyst Marc Elliott said: “Whilst news flow on diamonds is bearish, that management have not changed pricing guidance for now is a positive.”

Investors were again confident that Federal Reserve rate-setters would vote against a US rate rise, which boosted the price of gold and silver. That in turn helped gold producer Randgold Resources, 170p higher at 4,686p, and silver miner Fresnillo, up 34p to 768p.

Better-than-expected third-quarter results from Britain’s biggest drug maker, GlaxoSmithKline, up 53p at 1,420.5p, injected life into its rivals including AstraZeneca, 104.5p healthier at 4,179.5p.

The pharma sector’s rise dealt the FTSE 100 a shot in the arm as it gained 72.53 points to 6,437.8.

Morrisons, down 0.3p at 172.1p, was the only supermarket stock in the red after Bank of America Merrill Lynch dropped its recommendation from buy to hold. Aerospace engineers Rolls-Royce, down 1p to 673.5p, and GKN, 0.9p lower at 284.5p, were relatively unscathed by the profit warning from rival Meggitt.

After giving the green light to BT’s £12.5bn takeover of EE, the competition watchdog decided to approve the merger of Just Retirement and Partnership Assurance – the annuities groups hit by last year’s pensions reforms. Just rose 6p to 168p and Partnership 0.75p to 135.5p.