logo-loader

FTSE 100 ends up, miners buoyed by China, UK companies buy US firms

Last updated: 17:40 10 Feb 2017 GMT, First published: 06:52 10 Feb 2017 GMT

Pound coins, notes
  • FTSE 100, 250 close higher

  • Reckitt buys Mead Johnson Nutrition, Elementis buys SummitReheis

  • Pound unchanged against US dollar at $1.2505

  • Sterling up 0.14% against the euro at 1.1742 euros

FTSE 100 shares closed higher on Friday, led by miners buoyed by strong trade data from China while several UK companies were snapping up US stocks in a role reversal from that seen in the days after the June Brexit poll when UK companies were the target of foreign buyers.

The FTSE 100 share index finished up 0.4% at 7,258, with miners dominating the risers board.

Top gainer Rio Tinto (LON:RIO) climbed 5.6% to 3572.5p, Antofagasta (LON:ANTO) rose 4.7% to 866p and Anglo American was up 4.4% at 1352.5p, followed by Glencore (LON:GLEN) up 2.7% at 320.75p. BHP Billiton plc (LON:BLT) rose 2.4% to 1370p.

The shares were boosted by data from China showing better-than-expected growth in imports and exports last month, and this lifted metal prices.

The data also coincided with a thawing of attitude by the protectionist US President Donald Trump towards China.

Trump committed to honoring the "One China" policy in a phone call on Thursday evening with his Chinese counterpart President Xi Jinping. Trump had previously upended decades of diplomatic protocol by taking a phone call with Taiwan's president.

The biggest FTSE 100 faller was Reckitt Benckiser Group (LON:RB.), down 3% at 7025p after confirming it had bought US baby food maker Mead Johnson Nutrition (NYSE:MJN).

The total value of the transaction, including debt, will be $17.9bn. The companies said earlier this month that they were in talks about a deal.

Reckitt Benckiser will pay $90 in cash for each Mead Johnson Nutrition share, well above Thursday's closing price.

In the FTSE 250, which closed up 0.5% at 18,715, shares in Just Eat (LON:JE.) fell 6.5% to 518.5p after the chief executive of the online food delivery firm, David Buttress, said he was standing down due to "urgent family matters". But it was only the second biggest faller to RPC Group plc (LON:RPC) down 7.6% at 922.5p. On Thursday the company said it is to buy US plastics manufacturer Letica Group for up to £511mln ($640mln), the latest acquisition for the plastics engineering firm as it bids to expand in its reach outside Europe.

The acquisition, subject to approval from the US Federal Trade Commission and the Department of Justice, is expected to complete by the end of March, which it intends to fund by raising £552mln through a fully underwritten rights issue.

Top mid-cap gainer was Elementis plc (LON:ELM) up 10.1% at 303p. Elementis was the top riser as it entered into an agreement to acquire US-based specialty chemicals platform SummitReheis from an affiliate of One Rock Capital Partners for an enterprise value of $360mln.


 

1115 GMT - FTSE 100 firm but off highs; sterling gains on UK data

  • FTSE 100 adds 19 points, off best

  • Miners advance after strong China trade data

  • Pound back above US$1.25 versus the dollar

  • Reckitt up on US baby foods deal

11.15am … Data helps pound as well …

The Footsie held firm in late morning trading, supported by strength in heavyweight mining stocks after upbeat China trade numbers, while the pound ticked higher after robust UK data today.

Around 11.15am, the FTSE 100 index was ahead 19 points at 7,248, albeit drifting off the session peak of 7,274 – a three-week high.

On currency markets, sterling moved back above US$1.25 against the dollar, and firmed versus the euro after data showing UK industrial output rose more than expected in December, while the latest trade deficit was narrower than forecast, allaying fears of a slowdown as the Brexit process gathers pace.

Neil Wilson, Senior market analyst at ETX Capital, said: “Manufacturing output absolutely smashed expectations with growth of 4% from a year before against an expectation of 1.7% yoy expansion. Industrial production was 4.3% higher yoy against an estimate of 3.2%. Construction output was also higher.

“And even more encouragingly, trade figures suggest the UK economy is responding to Theresa May’s ‘global Britain’ rallying cry. Exports to non-EU countries are rising – Britain’s economy is adjusting to Brexit realities.”

Among equities, mid-cap speciality chemicals maker Elementis PLC (LON:ELM) was a strong gainer, up nearly 7% at  296p after announcing plans to buy US-based personal care chemicals-focused SummitReheis for around US$360mln.

But in the absence of much other corporate news, broker comment was a focus.

British American Tobacco plc (LON:BATS)  added 0.1% at 5,027p as German broker Berenberg upped its rating to ‘buy’ from ‘hold’ following the FTSE 100-listed cigarette maker’s move last month to take full-control of US peer Reynolds American Inc (NYSE:RAI).

Meanwhile FTSE 250-listed furniture and homewares retailer Dunelm Group PLC (LON:DNLM) rallied almost 5% higher to 646.5p after Numis raised its rating to ‘buy’ from ‘add’ following a recent update.

But engineering mid cap Senior PLC (LON:SNR) shed 2% to 194.1p after its rating was cut to ‘sell’ from ‘hold’ by Panmure Gordon.

Among the small caps, FIH Group PLC (LON:FIH) jumped 25% higher to 295p after it received a 300p per share cash bid from Blackfish Capital vehicle Staunton.

And Amur Minerals PLC (LON:AMC) rose almost 13% to 14.25p as its latest resource estimate from Kun-Manie in Russia indicated over one million tonnes of nickel worth US$10.5bn at current prices.

08.30 am … Miners celebrate …

The Footsie jumped higher in early trading powered by strong gains from heavyweight mining stocks following solid trade data overnight from top metals consumer China.

Around 8.30am, the FTSE 100 index was 32 points higher at 7,261, adding to yesterday’s 40 point advance after gains by US and Asian markets.

Connor Campbell, financial analyst at Spreadex, said: “The market seems keen to build on yesterday’s last minute growth, investors’ interest piqued by Donald Trump’s promise, written in his typically presidential style, of ‘something phenomenal in terms of tax’ in the next few weeks.

“After struggling with that 7200 for the last 3 weeks the FTSE smashed through that level just before the market closed on Thursday, and with another half a percent worth of growth this morning the UK is trading at its best price since mid-January.

“There wasn’t necessarily much reason behind the UK index’s surprise surge, so it will be interesting to see whether it can maintain its current levels as the day goes on.”

Miners led the blue chip advance in London, with Anglo American PLC (LON:AAL) the top gainer, up over 3% at 1,340p, and Rio Tinto PLC (LON:RIO) adding 2.7% at 3,474.5p.

However, precious metal miners missed out, with Randgold Resources PLC (LON:RRS) and Fresnillo PLC (LON:FRES) the top two FTSE 100 fallers, down 1.5% at 7,310p and 1.3% at 1,509p respectively, as the gold price retreated.

Among the corporate news, consumer products giant Reckitt Benckiser PLC (LON:RB.) rose 1.1% to 7.320p as it sealed a US$16.6bn deal to buy US baby food maker Mead Johnson Nutrition Co. (NYSE:LON) and revealed a rise in 2016 profits.

On the second line, online food delivery firm Just East PLC (LON:JE.) dropped 6% to 520p on news its chief executive officer, David Buttress is to quit at the end of the first-quarter due to “urgent family matters.”

06.50am ... Good gains predicted ...

The Footsie is expected to push higher at the open higher this morning following overnight gains by US and Asian markets, with mining stocks likely to be boosted by strong trade data from China.

Spread betting firm CMC Markets expects the FTSE 100 index to start around 28 points higher, extending yesterday’s 40 point rally.

Asian shares rallied to an 18-month peak today, as investors cheered upbeat Chinese trade data and strong gains overnight on Wall Street after US President Donald Trump promised to unveil a major tax announcement to lower the burden on businesses.

China's January exports rose 7.% from a year earlier, while imports jumped 16.7%, beating expectations, preliminary data showed, getting the economy off to a strong start in 2017.

Michael Hewson, chief market analyst at CMC Markets UK, said: “Asia markets have continued where US markets left off overnight after the latest China trade data saw  big jump in imports and exports, while the trade surplus widened out to a six month high of $51.4bn, a fact that is unlikely to be lost on the new Trump administration, with exports rising 7.9%, while imports jumped sharply to, by over 16% .

“As we come to the end of the third week of the Trump presidency and still with scant detail of what the new President intends to do with respect to future stimulus plans, financial markets latched on to his comments yesterday about “something phenomenal on tax in the next two to three weeks” like a thirsty man spying what looks like an oasis in the desert.

“The move to new record highs in equity markets and surge in the US dollar are symptomatic of a market craving a new stimulus. The risk is that as with most oases they turn out to be an illusion, and given the new President’s propensity for melodrama the risk is that this could well be no different.”

In the absence of almost any corporate news, aside from a trading update by Electrocomponents PLC (LON:ECM), the City’s main focus will be on a big batch of UK economic data.

With increasing worries over the impact June’s Brexit vote will have on the UK economy, December manufacturing, industrial and construction output numbers, plus latest trade figures, should all illustrate the pressures on British industry.

Howard Archer, chief UK and European economist at IHS Global Markit, said: “While the latest survey evidence suggests that the manufacturing sector is currently in good shape with strong orders growth boding well for output in the near term at least, there are significant challenges for the manufacturing sector that look likely to intensify as the year progresses.”

Friday’s Agenda

Trading update: Electrocomponents PLC (LON:ECM),

Interims: Oncimmune Holdings Ltd. (LON:ONC)

Around the markets

  • Sterling: US$1.2498, up 0.3%
  • Gold: US$1,2370 an ounce, down 0.9%
  • Brent crude: US$53.13 a barrel, up 0.25%

City Headlines

  • Reckitt target faces lawsuit over whistleblower claims – Financial Times
  • Trinity Mirror buyback row with MPs escalates – The Times
  • Auction house Christie’s sales hurt by world uncertainty – The Times
  • Vegetable shortage forces UK supermarkets to set sights on US – The Independent
  • US prosecutors end corruption investigation into Cobalt International Energy – Financial Times
  • Bank of England appoints Charlotte Hogg as Deputy Governor – The Guardian
  • Goldman Sachs moves hedge fund from London to New York following manager’s retirement – Daily Mail

FTSE rises ahead of Easter weekend, JD Sport gains on upbeat outlook -...

The FTSE 100 gained on the final morning of this shortened Easter trading week. Festive cheer was limited though, as Thames Water confirmed shareholders would not provide it with a £500 million rescue package, prompting speculation over the London supplier’s future. On a more positive...

1 hour ago