Higher gold prices brings boost for mining stocks

THE FTSE 100 began the week on the front foot yesterday, pushed higher by the knock-on impact of higher gold prices on mining stocks.

London’s top flight closed up 33.31 points, or 0.48 per cent, at 7,029.22, helped by the likes of Randgold and Fresnillo.

The miners were riding high after investors looked towards safe haven assets such as gold amid a tricky period for equities as the US and China trade war rumbles on and the prospect of higher American interest rates spooks markets.

Michael Hewson, chief analyst at CMC Markets UK, said: “This rise in the gold price has helped push Randgold Resources and Fresnillo to the top of the FTSE 100 as a weaker outlook for stocks prompts some haven buying in the wake of last week’s heavy stock market falls.”

The price of gold was up from $1,218.11 an ounce to around $1,228.24 at one point.

Randgold finished the day up 298p at 6,082p, while Fresnillo gained 35.8p at 912.2p.

Elsewhere, the high street bloodbath of Britain’s retailers showed no sign of letting up as Superdry became the latest to warn over profits, sending its shares tumbling.

The clothing brand warned its full-year performance will be impacted by the recent warm weather and additional foreign exchange costs. The company expects profits to be £10 million lower due to hot conditions across the UK, continental Europe and the eastern US.

Shares plummeted, closing down more than 21%, or 215p, at 800p.

Medical devices maker Convatec also faltered as the company released a double whammy of updates – a hit to sales and the retirement of its chief executive.

Convatec’s revenue in the fourth quarter is expected to be negatively affected, falling by between $18m and $23m (£13.7m to £17.5m).

The group said the adjustment was due to a change in inventory policy by the biggest customer of its infusion devices franchise.

The company also announced chief executive Paul Moraviec is to retire. Shares were down 74.2p at 150p.

Sterling had a relatively uneventful day as it clawed back lost ground against the dollar to end up 0.4% at 1.316 at the London close.

Versus the euro, the pound was trading up 0.1% at 1.135. However, Brexit is threatening to rear its head again as Britain and the EU head towards March 29 without sign of a coherent deal being in place.

In Europe, France’s CAC 40 was up 0.14% while Germany’s DAX rose 0.78%.

A barrel of Brent Crude was trading at $80.1, a rise of 0.4%.

The biggest risers on the FTSE 100 were Randgold Resources up 298p at 6,082p, Paddy Power Betfair up 275p at 6,290p, Fresnillo up 35.8p at 912.2p and Imperial Brands up 70.5p at 2,587p.

The biggest fallers on the FTSE 100 were BAE Systems down 22.4p at 561.8p, Ocado down 23.4p at 789.8p, Melrose Industries down 4.85p at 465.65p and Rightmove down 8.35p at 425.5p. US stocks ended lower in a choppy trading session yesterday, dragged down by technology stocks amid lingering worries over interest rates and corporate earnings.

The benchmark S&P 500 index teetered between positive and negative territory for much of the day but moved definitively lower in the last half-hour of trading. The Dow, which was positive for most of the session, reversed course.

The technology index fell 1.6 per cent, weighing the most on the S&P 500, while defensive sectors such as real estate consumer staples and utilities led the S&P’S major sectors in percentage gains.

The major stock indexes sold off sharply last week, which led to their sharpest weekly percentage declines in seven months. Investor concerns have mounted about the impact on corporate profits of tariffs and rising borrowing costs.

S&P 500 companies on average are expected to report 21.6% year-over-year profit growth, a decrease from the previous two quarters.

“The market is in wait-and-see mode,” said Keith Lerner, chief market strategist at Suntrust Advisory Services in Atlanta. “It’s waiting for earnings, waiting for the Fed, and waiting for economic data from China to see if things are stabilising.”

The Dow Jones fell 89.44 points to 25,250.55, the S&P 500 lost 16.34 pointsto 2,750.79, and the Nasdaq Composite fell 66.15 points to 7,430.74.