London stocks were dominated by gains from miners for a second time in a week while forecast-beating UK retail sales data put Brexit fears in the shade to give blue-chip stocks a firm close on Thursday.
The FTSE 100 ended up 0.14% at 6,868, albeit still off its 14-month highs struck on Monday at 6,941.
For the second time in a week, the top gainer among blue-chip stocks was Antofagasta PLC (LON:ANTO), up 3.7% to 562.48p. On Tuesday, it gained 8.7% after interims revealed heavy cost-cutting lifted the company’s fortunes.
BHP Billiton plc (LON:BLT), which at midsession was higher, slid in the last half hour of trading and ended down 0.24% at 20.86p.
Other mining-related stocks fared better. Glencore International PLC (LON:GLEN) closed up 2.8% at 197.99p while Anglo American PLC (LON:AAL) closed up 2.2% at 884.85p following the release of the US Federal Reserve’s July policy meeting minutes late on Wednesday.
The mining sector had suffered in Wednesday’s trading as traders anxiously awaited the minutes to see if they would reveal any clues about when a US rate hike might follow. More a “when” than “if” scenario was expected.
The US dollar weakened after the minutes shows that policymakers were divided over whether or not to raise interest rates, which on balance was interpreted as dovish by analysts next morning.
This helped to support commodity-related stocks, such as miners, as dollar-denominated commodities became cheaper to foreign currencies.
“The lack of consensus on when to raise rates even as two key risks have faded – market volatility following Brexit and May’s weak US jobs data - will certainly comfort those who feared the Fed was turning hawkish, especially after certain policymakers’ comments in recent days,” said Alastair George, Chief Strategist at Edison Investment Research.
The broad market also benefited from UK July retail sales that suggested, like Wednesday’s jobs data, that the impact of Brexit was not yet being felt on data and economic performance.
The pound was at a two-week high against the greenback after July’s retail sales figures comfortably beat expectations with a 1.5% sales rise last month.
The mid-cap FTSE 250 closed up 0.6% at 17,871. After a wobble for the UK-centric ticker in the aftermath of the Brexit vote on June 23, the FTSE 250 has made solid gains and now stands more than 500 points above its pre-Brexit levels.
The FTSE AIM 100 Index was up 0.5% at 3,739 while the FTSE AIM All-Share Index was also up 0.5% at 784.
A total of 36% of London stocks gained on Thursday, 23% fell an 41% were unchanged.
Top gainer was Tengri Resources (LON:TEN) up 42.9% to 1.25p while the top faller was Hague & London Oil PLC (LON:HNL), down 18% to 9.125p.
Midsession
The Footsie was treading water in the lunchtime trading session, despite a pleasant surprise from UK retail sales figures.
The FTSE 100 was just five points higher at 6,863, with what little impetus there was slowed by index constituents Reckitt Benckiser, Pearson and BATs trading in ex-dividend form.
UK retail sales rose 1.4% in July, confounding expectations of an increase of around 0.1% or 0.2%, and suggesting that consumers were not that fussed about Britain’s decision to leave the European Union – or maybe they were out spending like billy-o before all the prices start going up as a result of sterling’s post-Brexit vote slump.
“One swallow does not make a summer and Brexit-related uncertainty still has the potential to hit the consumer sector,” warned Martin Beck, senior economic advisor to the EY ITEM Club.
“Although rising inflation on the back of sterling’s fall will squeeze shoppers’ purchasing power, action by the Bank of England to cut borrowing costs and aid the supply of credit will provide some offset. If the UK can avoid any serious rise in unemployment, the odds of a severe drop in consumer spending look remote,” Beck suggested.
Investors took a shine to Harvest Minerals Limited (LON:HMI), which hit a 52-week high of 16p this morning before subsiding to 14.375p, up 18% on the day. The shares have risen more than 250% over the last month and the latest catalyst was the release of a scoping study that examined the economic potential of developing the Arapua fertiliser project in Minas Gerais, Brazil.
Contract awards piqued interest in a number of companies, including Arcontech Group PLC (LON:ARC), Hydrodec Group PLC (LON:HYR) and eg Solutions PLC (LON:EGS).
Arcontech, the provider of products and services for real-time financial market data processing and trading, sot up 13% to 0.39p after it extended its agreement with an existing customer and secured additional annual revenues of around £285,000.
Hydrodec, a specialist in transformer oil that is widely used in the electricity industry, climbed 12% to 3.625p after it was awarded a five-year contract for the supply of inhibited transformer and switchgear oil by Essential Energy, a major Australian utility.
“Although it will only make a modest contribution at the group level, it is a very significant contract both locally and strategically,” said chief executive officer Chris Ellis.
Back office optimisation software pioneer eg’s contract award was in the US, with an unnamed leading social networking corporation.
The three-year deal, closed by eg’s partner Aspect Software Inc, will see the firm deploy up to 4,000 licences, with the potential for more to be sold in the future.
Snapshot at 8.20am
The FTSE 100 was up 20 points to 6,878.
The top winner was Antofagasta (LON:ANTO), up 2% to 554p as it benefits from the recovery in copper and the recent turning point in a mine dispute.
The biggest loser was Pearson (LON:PSON), down 1.6% to 868.5p. (Ex-dividend) the group failed to meet expectations last month, investor confidence appears to be waning.
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Preview at 6.56am
The FTSE 100 is tipped to open higher on Thursday morning after UK markets finished lower yesterday, led by losses in mining sector stocks.
The likes of Glencore International PLC (LON:GLEN), Anglo American PLC (LON:AAL) and Antofagasta Plc (LON:ANTO) all shed more than 2% in Wednesday's trading, while motor insurer Admiral Group PLC (LON: ADM) also weighed on the FTSE.
Spread betting quotes suggest the FTSE 100 will open around 33 points higher at 6,892 to recapture most of yesterday’s losses.
In the US markets, the Dow Jones closed 22 points higher at 18, 574, while the S&P 500 index was also up slightly at 2,182.
Markets in Asia were trading mostly higher this morning, with the Hang Seng index up over 1%, or 242 points, to 23,042.
The notable exception to that was the Nikkei 225, which moved in the opposite direction and is on course for a fall of around 1.5%, or 260 points, to around the 16,486 mark.
Some big US stocks will publish results later on today, including retail giant Wal-Mart Stores, Inc (NYSE:WMT) and Gap Inc (NYSE:GPS).