Rio Tinto gets knocked as CEO leaves; FTSE up

MADRID (MarketWatch) � Shares of Rio Tinto PLC retreated after the departure of its top executive and a $14 billion charge taken by the mining company, but they had trimmed their decline by the close of London trading Thursday as the broader market found support on the back of upbeat U.S. economic data.

The U.K.�s FTSE 100 index UK:UKX �rose 0.5% to end at 6,132.36. The benchmark had closed at 6,103.98, off 0.2%, in Wednesday trading.

Mike McCudden, head of derivatives at stockbroker Interactive Investor, said the biggest test for markets this week remains Chinese data due Friday. Mining stocks, a heavyweight sector in the London market, are especially sensitive to economic signals out of China.

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�We are however continuing to see profit-taking from investors thanks to the recent rally but as yesterday�s performance showed, with every wave of selling there emerges a new tranche of investors ready to buy in on the dips,� he wrote in emailed comments.

Economic data from the U.S. inspired some afternoon gains for London stocks, including housing starts for December that surged to a four-year high, blowing past economists� forecasts. On Wall Street, shares scored broad gains. See: U.S. stocks rise as economic view brightens.

Shares of Rio Tinto RIO UK:RIO fell 0.5%, partially recovering after an earlier fall of more than 2%. The catalyst was Tom Albanese�s departure as chief executive on news that the Anglo-Australian mining group will book a $14 billion impairment charge. Read: Rio Tinto CEO steps down after $14 billion charge

Citigroup, however, lifted its rating on Rio Tinto to buy from neutral and advised investors not to overreact to the day�s news.

�One of our structural bearish criticisms of the sector has been poor capital allocation, and lack of shareholder focus. We believe today�s announcement could significantly realign Rio Tinto with shareholder interests through reduced M&A and reduced capex spend,� the analysts said in a note.

Also on the downside, shares of Aberdeen Asset Management PLC UK:ADN fell 1.7%. Assets under management at the fiscal-year end rose to 187.2 billion pounds from 169.9 billion pounds, the company said.

On the upside, shares of Associated British Foods PLC UK:ABF jumped 3.2%. The diversified food, ingredients and retail company reported revenue for the first 16 weeks was 10% ahead of last year, adding that it now expects to make more progress in full-year adjusted operating profit.

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Banks also moved higher in London, with shares HSBC Holdings PLC HBC UK:HSBA moving up 1.1% and Barclays PLC UK:BARC BCS adding 0.9%.

Deutsche Bank released a positive note on the sector Thursday, with analysts turning more cautiously optimistic on the trend for provisions for payment protection insurance. Many U.K. banks have had to take provisions for the �misselling �of such insurance.

�Though we would not be surprised to see �top-ups� to provision levels in 4Q12 results, we think banks already hold significant capacity for future repayments at current claim rates, and that recent redress and search volumes suggest claims may be slowing,� the analysts wrote in a note.