Rising copper prices lift shares in FTSE’S mining heavyweights
COPPER prices extended their longest winning streak to a 10th day to send London’s mega miners to the top of the FTSE 100 risers’ board for a second straight day.
The industrial metal is on course for its strongest year since 2009 and prices soared to a four-year high on a perfect storm of a sinking dollar, growing confidence in Chinese demand and a sentiment-boosting squeeze on supply caused by the Asian powerhouse ordering its top producer, Jiangxi Copper Company, to halt production for at least a week.
London’s global miners followed the price higher yesterday as copper climbed to $7,312.50 per tonne. In 2016, prices fell as low as $4,331 per tonne amid fears of slowing demand from China.
Buoyed by metal prices recovering, commodity stocks have been transformed from laggards to leaders on the FTSE 100 this year.
Mining giant Rio Tinto led the FTSE 100 leaderboard yesterday, climbing 58.5p to £38.58, while copper specialist KAZ
Minerals, the best performing stock on the FTSE 350 in 2017, rallied 20.5p to 859p. Chile-focused producer
Antofagasta jumped 8p to 992.5p, while commodity heavyweights Glencore and
BHP Billiton gained 2.3p to 385.5p and 13.5p to £14.99, respectively.
Copper’s rise to a four-year high lifted confidence on the markets that 2018 will be another year of robust global growth, Accendo Markets analyst Henry Croft said.
Commodity prices were also helped by the dollar slipping, with sterling climbing as much as 0.5pc against the greenback to above $1.3450.
Despite monetary policy tightening at the Federal Reserve and robust GDP growth continuing, the dollar has endured its worst year against the euro since 2003, shedding 12pc of its value.
Elsewhere, thin trading continued on London’s stock market amid a dearth of corporate news. The
FTSE 100 and FTSE 250 inched higher to hit fresh all-time records with the blue-chip index edging up 2.2 points to 7,622.88, and its mid-cap peer creeping 2.27 points higher to 20,642.31.
FTSE 250 pharmaceuticals company Vectura, which was the subject of takeover chatter earlier this month, regained its momentum, moving 7.5p higher to 121.5p on unusually thick volumes.
The inhaler maker’s share price jumped 8.2pc when traders returned from the festive break on Wednesday, and has rallied 31pc in a month amid City rumours that one of its partners could be ready to swoop after its sinking shares left it on the brink of relegation from the mid-cap index in November’s quarterly review.
BT, British American Tobacco and blue-chip newbie Halma all pulled back after going exdividend. Old Mutual came off a nine-month high, slipping 2.9p to 224.9p. Shares in the Anglo-african financial giant have rallied this month since South Africa’s ANC appointed Cyril Ramaphosa as leader and the company sold part of its UK asset management unit.