Rich seam for min­ers from Asian rally

The Daily Telegraph - Business - - Business - la­toya hard­ing

mar­ket re­port

A RALLY in Asia-Pa­cific mar­kets helped boost Euro­pean eq­ui­ties yes­ter­day as in­vestors seemed to be bet­ting on an eco­nomic re­cov­ery and were op­ti­mistic about progress to­wards a coro­n­avirus vac­cine.

A spike in in­fec­tions across the globe, how­ever, kept a lid on gains.

Euro­pean stock mar­kets were well over 1pc up by the close, with Lon­don’s bench­mark FTSE 100 climb­ing 1.33pc to 6,176.19 and Frank­furt’s Dax hot on its tail, ris­ing 1.32pc.

Paul Dono­van, of UBS Wealth Man­age­ment, said: “Eq­uity mar­kets seem rel­a­tively un­con­cerned with the ris­ing num­ber of US Covid-19 cases. Although fear in the US would ap­pear to have in­creased, the level of fear is noth­ing like that seen ear­lier this year.

“Na­tional lock­downs re­main very un­likely. There is also the pos­si­bil­ity that the in­crease in cases will en­cour­age fur­ther fis­cal stim­u­lus.”

Min­ers were among some of the top ris­ers, fol­low­ing a jump in com­mod­ity prices, as iron ore, lead, alu­minium and zinc ral­lied dur­ing the ses­sion.

The price of cop­per also ral­lied yes­ter­day, hit­ting a two-year high in Lon­don, af­ter cop­per min­ers in Chile voted to strike. Glen­core and An­glo

American jumped 3.02p to 178.4p and 43.2p to £19.68, re­spec­tively, while sil­ver miner Fres­nillo climbed to the top of the FTSE 100 lead­ers, up 52.8p to 992.8p, a rise of 5.6pc.

Gold miner Cen­tamin also re­ceived a boost af­ter re­veal­ing it was on track to meet its full-year guid­ance af­ter se­cond-quar­ter rev­enue jumped 54pc. Sales were driven by stronger pro­duc­tion and higher prices for pre­cious metal.

It also re­vealed it had pro­duced 130,994 ounces of gold – which is cur­rently above the $1,800 an ounce mark – from its Sukari mine in Egypt dur­ing the se­cond quar­ter of 2020. Cen­tamin shares rose 3.6p to 191.5p.

Mean­while, Boohoo con­tin­ued to plum­met af­ter Stan­dard Life Aberdeen, the UK’s largest listed as­set man­ager, dumped the ma­jor­ity of its stock in the fast-fash­ion re­tailer on Fri­day. Adding to the bad news, Bank of Amer­ica cut its price target for the re­tail com­pany from 475p to 350p.

In a note to clients it said that costs at Boohoo could in­crease by be­tween £10m to £20m as it tries to fix is­sues in its sup­ply chain. “The key un­known is the ex­tent to which un­der­pay­ment of work­ers is preva­lent,” a team at Bank of Amer­ica, led by an­a­lyst David Holmes, wrote.

“If small scale, bad ac­tors can be iden­ti­fied, re­la­tion­ships ter­mi­nated and ca­pac­ity shifted to abid­ing fac­to­ries. The in­cre­men­tal cost in such a sce­nario should be lim­ited.”

Boohoo, which has in­sisted there is no ev­i­dence its sup­pli­ers are pay­ing staff less than the min­i­mum wage, ended 49.5p lower at 230p, a fall of 17.7pc.

Else­where, G4S shares led the mid-cap ris­ers on the back of a pos­i­tive state­ment de­spite plans to cut 1,000 jobs in its cash han­dling di­vi­sion.

The group said it ex­pects first-half earn­ings to be sig­nif­i­cantly higher than the £159m that eq­uity an­a­lysts are pre­dict­ing and brought for­ward the earn­ings re­lease date to the week com­menc­ing July 20. It rose 11.05p, or 9.25pc, to 130.5p.

Other no­table ris­ers yes­ter­day were chem­i­cals group John­son Matthey, up 93p to £22.07, and hospitalit­y group In­ter­con­ti­nen­tal Ho­tels, which rose 111p to £38.85.

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