FTSE 100. FTSE 250 gain
Mining stocks popular
Pound up 0.08% against US dollar at $1.2499
Sterling up 0.47% against euro at 1.1793 euros
FTSE 100 shares closed higher on Monday as buoyant mining stocks responded to a strike in Chile which boosted copper prices.
The market was also buttressed by record gains for the Wall Street trio of top tickers, the small-caps Russell 2000 and even Toronto’s TSX Composite waded in with an all-time high.
London’s FTSE 100 closed up 0.3% at 7278.
Anglo American (LON:AAL) was the top gainer on the index, notching up a 4.2% rise to 1409.5p, while Rio Tinto (LON:RIO) and Glencore (LON:GLEN) followed close behind with gains of 3% to 3679.5p and 2.6% to 328.95p respectively.
Copper prices gained following a strike at the world's largest copper mine in Escondida, Chile.
On the flipside, business services firm Capita (LON:CPI) was the biggest loser, shedding 2.4% to 513.5p. But Capita has some good news, of sorts.
Capita and the Co-operative Bank resolved their differences over claims that the outsourcing firm withheld payments from the bank due to delays as it helped administer mortgages for Capita's clients, saving over 700 jobs.
FTSE 100-listed Capita said on Monday that its Western Mortgage Services business will continue to provide mortgage administration services and process new mortgage applications for the Co-op Bank, while work on the transforming the IT system will cease.
The mid-cap FTSE 250 ended up 0.2% at 18,758 and led by Ferrexpo plc (LON:FXPO) up 6.7% to 175p in line with other miners.
The FTSE AIM 100 Index ended down 0.1% at 4311 and the FTSE AIM All-Share Index flat at 900.
Gainers outnumbered losers on the London bourse, with risers at 36% and losers at 29%.
1515 GMT - FTSE 100 extends advance as US stocks post new records
FTSE 100 gains over 36 points
US stocks hit new records
Miners lifted by copper price, broker comment
RBS gains on cost-cutting report
3.15pm … US provides lift …
The Footsie broke out of its earlier lethargy to push higher in late afternoon trading as US stocks made a strong start boosted again by hopes for a Trump tax plan boost
Around 3.15pm, the FTSE 100 index was ahead about 36 points at 7,294, near its highs for the day.
In early trade on Wall Street, the Dow Jones jumped over 100 points higher to 20,369, while the broader S&P 500 gained nearly 10 points, and the tech-laden Nasdaq composite rose 30 points.
All three US indices were trading at fresh record levels, having all ended at new all-time highs on Friday.
FXTM Research Analyst Lukman Otunuga, said: “The prospects of U.S President Donald Trump unleashing a ‘phenomenal’ tax plan in the coming weeks have boosted risk sentiment consequently elevating global stocks.”
But he added: “Although there is a possibility of stocks following a positive trajectory this week from the rekindled risk appetite, the threat of Trump’s ‘phenomenal’ tax plan falling short of market expectations may limit upside gains.”
2.25pm ... Powder kept dry ...
Traders kept the powder dry on a low-key start to the week as the FTSE 100 added just 15 points in mid-afternoon to move to 7,273.71 on thin volumes.
Only the miners, benefiting from stronger iron ore and copper prices, saved the index of blue-chip shares from moving into reverse gear.
“With a serious dearth of both macro data and significant speakers on either sides of the Atlantic, investors have been left with scraps to provide early direction,” said Henry Croft of Accendo Markets.
The pound’s recovery, particularly against the euro, gave British Airways owner International Consolidated Airlines’ (LON:IAG) shares a boost, while a Deutsche Bank upgrade to ‘buy’ provided a lift to shares of budget carrier Ryanair (LON:RYA).
Dropping down a division to the FTSE 250, publican Greene King’s (LON:GNK) upbeat update on Friday gave way to a bout of pessimism today.
The problem? A slowdown in growth from November through to last month, which had City analysts reaching for the red pens. The shares were off 4%.
“We feel the group could struggle in the near term, as consumer spending is squeezed by lower sterling, but its freehold estate and potential self-help measures mean it should be more than capable of weathering the storm,” said Nicholas Hyett, equity analyst at the investment house Hargreaves Lansdown.
12.30pm ... Copper-bottomed ...
Strength in the mining sector on firmer copper prices continued to provide the main prop for the FTSE 100 index at lunchtime, although gains remained fairly moderate.
Around 12.20pm, the UK blue chip index was up about 6 points at 7,264, meanwhile the FTSE 250 index was stronger, holding close to a new record high of 18,775, up almost 50 points.
Commodities trader and miner Glencore PLC (LON:GLEN) was the top FTSE 10 gainer, adding nearly 2.5% at 328.65p, also supported by an upgrade in rating from US bank Morgan Stanley to ‘equal-weight’ from ‘underweight’.
Meanwhile RBC Capital raised its target price for fellow miner Rio Tinto (LON:RIO), which gained 18% at 3,636p.
Elsewhere, Royal Bank of Scotland Group PLC (LON:RBS) was also a good blue chip riser, up 1.1% to 231.5p following reports the majority state-owned lender plans to cut about £800mln in costs this year.
The bank, which is expected to report its ninth consecutive annual loss later this month, is set to axe further jobs and close more high street branches as part of the cost cuts, the Sunday Times reported.
But Neil Wilson, senior market analyst at ETX Capital, said: ”Cost cutting measures help but there are only so many branch closures and retrenchments possible. Investors will want to see a lot more than just cost cutting before RBS starts to perform like its peers, but a profit still seems a long way off.“
He added: “Annual results from the big UK banks are due out next week – HSBC (Feb 21st), Lloyds (Feb 22nd), Barclays (Feb 23rd), RBS (February 24th) – which ought to offer a better idea of just how RBS is doing versus its peers.”
With other financial stocks, blue chip investment platform group Hargreaves Lansdown (LON:HL.) gained 1.2% at 1,382p thanks to an upgrade from broker Peel Hunt to ‘add’ from ‘hold’ which cited a stronger-than-expected first-half performance from results last week.
10.45am … Modest gains held …
The Footsie remained modestly higher as the morning session progressed, supported by strength in heavyweight mining stocks as copper prices got a boost.
Around 10.30am, the FTSE 100 index was ahead about 8 points at 7,266, just staying below the earlier session peak of 7,372,
More exciting, however, was the broader FTSE 250 index, which reached a new all-time high this morning at 18,751.
Joshua Mahony, market analyst at IG, said: “Today looks like providing a relatively calm day for markets, with the economic calendar featuring precious few events of note.
“The early gains seen in the FTSE are fading somewhat, with marginal upside across Asian equities reflecting the indecision we are seeing today.
“However, we are seeing the FTSE 250 reaching a fresh record high this morning, throwing off any fears of economic peril upon activating Article 50 next month.
“The fact that the FTSE 250 is more domestically focused means there are a greater degree of firms which will be benefitting from greater international competitiveness thanks to a weakened pound.”
Among the mid caps, fintech software firm Fidessa Group PLC (LON:FDSA) was a strong gainer, adding 4%, or 96p at 2,496p after it reported a 25% jump in its full-year profit to £48.8mln.
Among the small caps, EG Solutions plc LON:EGS) jumped nearly 20% higher to 49p as it predicted record revenues of at least £5.69mln in second half of the year to January after a refocused strategy and several contract wins boosted trading.
But Tanfield Group PLC (LON:TAN) shed around 6% at 13.5p as Smith Electric Vehicles ceased all trading operations. Tanfield owns a 5.76% stake in Smith, but already has taken a full impairment for its stake.
8.40am ... Sideways start ...
The FTSE 100 traded almost sideways on open, rising just 5 points to 7,264.18, as the UK marched to its own beat and ignored the positivity emanating from Asia overnight and the record close on Wall Street Friday.
The miners kept the index of blue-chip shares afloat early on, buoyed by the rise in the copper price, which hit a high not seen since 2013.
Antofagasta (LON:ANTO), the Chilean digger that specialises in the red metal, was joint top leader of the Footsie early on as it rose 2.4% along with Anglo American (LON:AAL).
Associated British Foods (LON:ABF) was up strongly early on after a Morgan Stanley upgrade with the American broker going to ‘overweight’ from ‘neutral’ on the owner of the Primark discount clothing chain.
6.45am ... Cautious start predicted ...
UK shares look set to make a cautious, but positive start to the week, taking their cue from Asia’s main markets.
The spread betters expect the index of blue-chip shares to advance 12.5 points to 7,271.75.
“While US markets have been able to achieve new records on an almost weekly basis in recent weeks, markets in Europe have continued to be constrained by political risk and this may well not change in the short to medium term,” Michael Hewson, commentator for CMC Markets.
“[This] despite some evidence of an improving economic outlook, across the globe, as Asia markets built on Friday’s US gains.”
The Nikkei 225 was up 0.5% after official data showed the Japanese economy had expanded for the fourth straight quarter.
Prime Mininster Shinzo Abe’s visit to the US also played well with the local investment community with the rhetoric from the White House far more conciliatory in tone than expected.
The Shanghai market (up 0.6%) benefited from follow-through buying on the back of Friday’s positive trade numbers, which had a wider regional impact.
It also helped push the copper spot price to a high not seen since 2013.
The dampener to sentiment was North Korea’s missile test.
Looking ahead, US Federal Reserve chair Janet Yellen may provide some additional pointers as to America’s interest rate policy as she appears in front of the Senate Banking and Financial Services committees later this week.
Closer to home, we are likely to see an uptick in the news flow from UK companies this week with updates from Rolls Royce, TUI travel, Acacia Mining and Shire Pharma.
Business Headlines
- Discoveries of new oil and gas fields have dropped to a fresh 60-year low, as companies put a brake on exploration and large fields have become harder to find – FT.
- Marks and Spencer has held talks with Christos Angelides, the former Next product director, about leading its latest attempt to turn round the department store’s out-of-vogue fashion business – FT.
- Barclays has proposed freezing its chief executive’s maximum pay package for three years as it seeks to avoid the pay disputes engulfing other companies – Times.
- OPEC is expected to confirm that Saudi Arabia has slashed output by more than required and delivered record levels of compliance with the cartel’s promised cuts – Times.
- Banking software group Misys is understood to be mulling a return to the London Stock Exchange, in a boost to London’s flotation markets – Daily Mail.
- Electronics component maker Laird is mulling a sale of one of its major divisions as the struggling company battles to turn itself around – Telegraph.
- Royal Bank of Scotland is preparing to cut more costs and chop more workers, but played down reports it will cut 15,000 staff in the next round of shrinking – Telegraph.