Analysts pick beneficiaries of Obama victory Initial gains made by the FTSE 100 in the morning were soon reversed as investors looked ahead to the looming political battle over the US fiscal cliff - some $600bn of government spending cuts and higher taxes due to come into force in January. Europe was a major drag on market sentiment too, with fresh worries sparked by the European Commission, which slashed its 2013 forecast for euro-area economic growth. The FTSE 100 dropped 93.27 points to 5,791.63, while the Dow Jones Industrial Average had tumbled more than 300 points by the time London closed. Among the blue-chips, gold miner Randgold Resources was the heaviest faller after the group guided that full-year production will be at the bottom end of the 825,000 ounce-to-865,000 ounce range. Disappointed investors sent the shares down 475p to £69.50. Water companies remained under pressure as analysts once again drew attention to the uncertain regulatory environment caused by last month's Ofwat licence proposals. Citigroup argued that many of the suggested changes would increase costs for water groups, while the muddied outlook for the industry has made M&A less attractive. There has been recent speculation in the market that United Utilities could be a bid target. The broker cut its recommendation on Pennon, 21 lower at 692½p, to "sell" and lowered Severn Trent, down 41p at £15.37, to "neutral." However, Citi lifted its target price on United Utilities to 650p from 640p, in part because of the lift it has received from recent takeover chatter. Nevertheless, in a weak market the shares declined 9½ to 660p. On the FTSE 250, 120.23 points lower at 11,961.32, engineer Spirax-Sarco topped the table, rising 159p to £21.40. The company said operating profits climbed 8pc in the four months ending October 31, and unveiled the £3.3m acquisition of Termodinámica, its distributor in Chile. Gambling software group Playtech advanced 14 to 425p after posting a 32pc increase in third-quarter gross income. Moneysupermarket.com climbed a further 6.8 to 148.8p. The shares have gained 11pc so far this month and the group releases a trading update next Wednesday. Oil and gas explorer Soco International, which has operations in Vietnam, was buoyed by the news that Coastal Energy is a takeover target of Indonesian state-backed group Pertamina. Coastal, 100p better at £13.10, has assets in Malaysia and Thailand and speculative investors made the read-across to Soco, 4.2 higher at 364½p. Rathbone Brothers shed 28p to £12.45 after placing 2m shares at £12.35 apiece, to finance further acquisitions, having announced the takeover of Taylor Young Investment Management today. Technology group WANdisco provided more cheer for investors who bought into the company's flotation at 180p in June. The shares rose 35 at 442½p after the group secured a US patent for its key data replication technology. Finally, Tangiers Petroleum jumped 1.625 to 24.375p amid speculation the company may soon announce a farm-out agreement in Morocco. Glencore and Xstrata dip on opposition to takeover Glencore and bid target Xstrata underperformed the wider market after shareholders in the mining group were urged to reject the commodity trader's takeover offer. Corporate governance group Pirc argued that because of the complexity of Glencore's operations, it "would have liked to have seen evidence of more extensive due diligence." Pirc also questioned the independence of Xstrata's board and recommended investors vote against the $33bn deal on November 20. The tie-up between the two companies became a painfully drawn-out affair after Qatar Holding, Xstrata's second-biggest shareholder, held out for better terms, forcing Glencore to revise its offer. Xstrata closed down 19.7 at 975.8p, while Glencore lost 6.95 to 340.35p.