Mining shares boosted by £500bn G7 spending plan
SHARES in London rebounded after global leaders rallied together to boost spending in a move that could fuel demand for commodities.
The FTSE 100 rallied 0.7pc, or 49.51 points, at 7258.32 and the FTSE 250 added 1pc, or 195.24 points, to reach 19,318.95.
Over the weekend the G7 announced a £500bn infrastructure package to help developing countries. It has been touted as an alternative to China’s Belt and road Initiative, which pumps billions into countries around the world to fund projects from buildings to roads.
The pledge boosted mining stocks, in particular, despite lingering fears of recession.
Antofagasta was up 3.3pc, or 38.5p, to 1223p, Anglo American rose 2.2pc, or 67.5p, to 3133.5p, Glencore added 1.5pc, or 6.5p, to 452.75p and Rio T into climbed 1.5pc, or 72p, to 5051p.
Susannah Streeter, senior investment and markets analyst at hargreaves Lansdown, said: ‘Miners have started on the front foot, helped by the plans for a potential £ 500bn global infrastructure boost, which was unveiled at the G7 summit.
‘It’s hoped this scheme, seen as a counter to China’s Belt and road Initiative, will set off a spurt of spending and demand for commodities around the world.
‘But there are already some concerns about the watering down of commitments amid escalating costs of some planned projects due to inflationary pressures.’
She added: ‘Concerns about inflation aren’t likely to go away any time soon.’
On Wall Street, the Dow Jones Industrial average was down 0.2pc, the S&P fell 0.3pc and the
Nasdaq Composite dropped 0.7pc. Back in the FTSe 100, shares in Centrica ticked up 1.3pc, or 1.04p, to 82.2p after the British Gas owner withdrew its interest in taking over the collapsed energy firm Bulb.
Meanwhile Credit Suisse downgraded Ocado to ‘neutral’ from an ‘outperform’ rating and slashed the target price to 960p from 1,600p. The broker noted shares in the grocer-turned-tech-platform are down 40pc since February.
‘Ocado has significantly downgraded its retail outlook,’ Credit Suisse added. The retailer recently tapped investors for £578m of funding. Shares dropped 1.2pc, or 10.6p, to 860p yesterday.
Fellow retailer Dunelm was dragged down 2.4pc, or 20p, to 814p. But B&Q and Screwfix owner Kingfisher was up 2.2pc, or 5.4p, at 248.7p and B&M rose 0.5pc, or 1.9p, to 387.3p and.
among the mid- cap stocks, Biffa was forced to delay publishing its full year results for the second time in a matter of weeks. Shares slid 2.1pc, or 8.6p, to 398.4p after the waste management firm said its auditor Deloitte has asked for more time to review the ongoing landfill tax enquiry conducted by hMrC.
The company planned to publish its results today, having previously opted against doing so on June 16 after it received a possible takeover offer by investor energy Capital Partners for 445p per share. Biffa said it expects its full year results to be in line with earlier trading updates
holiday giant Tui clawed back some of its recent losses to end up 2.2pc, or 3.25p, to 149.2p.
The firm on Friday said its boss Friedrich Joussen, who was at the helm for nearly ten years, will be replaced by the chief financial officer Sebastian ebel in October.
Other travel stocks in the black included Easyjet, up 2.2pc, or 8.7p, at 403.6p, and Wizz Air which added 1.9pc, or 37.5p, to 2006p.
exhibition and conference organiser Hyve (up 4.3pc, or 2.9p, to 70.9p) said the first half of 2022 saw ‘faster than anticipated revenue recovery’.