Miners receive lift as China digs deep
LONDON’S miners lifted the FTSE 100 yesterday as Chinese relief measures pushed up metal prices and gold shifted upwards once more.
Base metals such as copper, aluminium, nickel, zinc and iron all rose after the People’s Bank of China added 700bn yuan (£77bn) of stimulus to the country’s commercial lenders, supporting the manufacturing-heavy economy.
Diversified miners benefited strongly for the broad-based climb. Anglo-American led the group, rising 53.2p to £19.32, while BHP and Glencore all also gained ground.
Royal Bank of Canada analysts said China’s recovery has helped mining stock shake off the pandemic price hit: “A quick recovery in China and supply disruptions have driven metals prices and the equities mostly back above pre-Covid levels in January.”
They warned that momentum “seems to be fading” in share prices, however.
The climb was enough to lift the FTSE 100 above European peers during a sleepy session which saw continued pressure on travel stocks.
Precious metal miners also performed strongly as the price of gold edged higher following a dip over recent weeks labelled a “long overdue correction” by Saxo Bank’s Ole Hanson. Polymetal rose 57p to £20.34 while Fresnillo climbed 28.5p to £12.51, a rise of 2.3pc.
Other blue-chip risers included Rightmove, which climbed 10p to 631.4p after saying homes sales reached a record level following a “mini-boom” between mid-July and early August. The property platform said the climb was caused by pent-up pandemic demand, and Londoners looking for an escape to the country.
Travel stocks continued to feel the brunt of losses, with British Airwaysowner IAG taking up an increasingly familiar spot as the index’s biggest faller, down 10.3p to 184.25p. Premier Inn-owner Whitbread dropped 2.4p to £23.85, while InterContinental Hotels fell 100p to £40.48.
It was a similar story on the FTSE 250, with easyJet, Carnival and Tui all among the biggest fallers. EasyJet dropped 26.20p to 544.6p after confirming it would close three of its airport bases, as budget peer Ryanair cut down on its September and October flight plans following a dip in demand. Citi analysts opened a negative catalyst watch on the carrier, warning “the company metrics will struggle and deteriorate in the aftermath of the increased quarantine restrictions enacted by the UK on Friday”.
Mining group Petropavlovsk led mid-cap risers after a series of management changes. The group named Maksim Meshcheriakov as its new interim chief executive, and James W Cameron Jr as its chairman.
Cranswick shares rose 252p to £40.76 after the pork producer said it anticipates results ahead of its previous expectations.