Fresnillo leads FTSE 100 gainers as gold climbs back above $5,180 while IAG attracts buyers at depressed valuations
London-listed miners and airline stocks staged a partial recovery on Tuesday, reversing some of Monday's sharp losses as gold prices rebounded and investors reassessed whether the previous session's sell-off had been overdone.
Fresnillo PLC (LSE:FRES), the FTSE 100 precious metals miner and the world's leading silver producer, led the gains as gold recovered to around $5,184 per ounce, clawing back ground lost when the metal fell to approximately $5,090 on Monday as a stronger dollar and geopolitical risk weighed on non-yielding assets.
Antofagasta PLC (LSE:ANTO), the Chilean copper producer, and Anglo American PLC (LSE:AAL), the FTSE 100 diversified miner, also moved higher as copper prices steadied after touching three-week lows in the previous session.
The partial dollar retreat gave commodity prices room to recover, unwinding some of the pressure that had sent both metals and mining equities sharply lower when the currency hit its highest level in more than three months on Monday.
International Consolidated Airlines Group SA (LSE:IAG), the owner of British Airways and Iberia, also attracted buyers after falling more than 5% in the previous session as surging oil prices stoked fears over fuel costs.
Analysts noted that IAG's valuation, at a price-to-earnings ratio of around six, looked stretched on the downside given the company's recent full-year results, which showed operating profit rising 13.1% to €5 billion and a €1.5 billion capital return programme announced in February.
Whether Tuesday's bounce marks a genuine stabilisation or a pause within a deeper correction will depend heavily on how the Iran conflict and oil prices develop through the week.