Miners dig deep to help FTSE 100 end week in positive territory
MINERS led the blue-chips higher yesterday as London traders prepared for a three-day break. Resources companies dominated the leaderboard, with the sector rising more than 1pc and outperforming an otherwise flat index.
Top of the class was
Antofagasta, which rose 3.6pc to 833.6p helped by an upgrade to “outperform” from RBC. Analysts said the Chile-based copper miner “ticks nearly all the boxes” they look for in a resources business. These include assets that can be grown and that work in countries welcoming to the industry, as well as operating in a market with “compelling” fundamentals.
Often referred to as the only metal with an economics degree, copper is seen as a good leading indicator of the global economy because of its widespread use. Worries about the world economy pushed copper as low as $5,760 per ton this month, from the near five-year high of around $7,300 it was at in July. The slump in copper has cut Antofagasta’s share price by about a fifth in the year to date and as London trading ended, copper was at close to $6,000.
Five other miners took top-10 places among the FTSE 100 risers yesterday.
BHP added 2.2pc to 1,661p after analyst meetings yielded predictions of higher shareholder payouts, with chief executive Andrew Mackenzie saying he was not contemplating acquisitions, and work to cut the company’s debt load
was finished. Also on the up were Glencore, 3.3pc better at 320.75p, Anglo
American, up 2.5pc at 1,575p, silver miner
Fresnillo, 2.5pc stronger at 947.2p, and Rio Tinto, which gained 1.6pc to 3,719p.
Fellow risers were the oil companies as Brent crude climbed above $75 a barrel for the first time this month. Worries over supply grew, with output from the North Sea and Middle East the focus of concern. BP was 1.1pc better at 563.7p and
Shell added 1pc to 2,614p. Left gasping were tobacco companies after Jefferies cut its estimate on how popular “reduced risk” alternatives to cigarettes will be. The broker estimated “vaping” and similar products will reach only 40pc market penetration in the US and other launch markets by 2026, down from an earlier assessment of 50pc to 60pc.
While this should support traditional tobacco products, Jefferies issued a swathe of downgrades, resulting in British American Tobacco being the biggest blue-chip faller,
with Imperial Brands not far behind. The former lost 3.4pc to 3,909p, and the latter 1.6pc to 2,800p.
Overall, the FTSE 100 ended the day just in positive territory, rising 0.19pc to 7,577.49, up 0.025pc on the week. The FTSE 250 gained 0.13pc to 20,691.41.
Among the minnows, Aim-listed oil explorer Bahamas Petroleum
Company (BPC) plunged 68.8pc after saying its exclusivity deal with an oil major, which started in May, would end this month.
BPC received $1m (£0.8m) in payments from the company and said it would now begin discussions with other parties.