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FTSE 100 Index edges into positive territory after mining stocks surge

Published 08/06/2016

The FTSE 100 edged 2.7 points lower to 6281.8
The FTSE 100 edged 2.7 points lower to 6281.8

London's top flight index edged into positive territory after mining stocks surged on the back of strengthening commodity prices.

The mining giants dominated the biggest risers thanks to a lift in the copper price, triggered by the weak dollar and data revealing China's strong copper imports in May.

The FTSE 100 Index was 16.99 points higher at 6301.52 as the price of Brent crude rose for the third day in a row, boosting Royal Dutch Shell and BP by more than 2% and close to 1% respectively.

But gains were restricted on the London market after the World Bank slashed forecasts for this year's global economic growth to 2.4% from the 2.9% previously predicted.

Across Europe, Germany's Dax was down 0.7% and the Cac 40 in France was 0.6% lower.

The price of oil was up 1.8% to 52.35 US dollars a barrel after data showed the US was drawing down on its crude stockpiles in response to falling imports after supply outages in Nigeria, Canada and Libya.

Sterling was up 0.1% against the dollar at 1.455, while the pound was 0.3% down against the euro at 1.276.

In stocks, mining giant Anglo American was the biggest riser, up nearly 5% or 32p to 697.5p, while Fresnillo also climbed 48p to 1197p. Royal Dutch Shell and BP rose 43.5p and 1808p and 3.3p to 376.6p respectively.

Supermarket giant Sainsbury's was up more than 1% or 3.9p to 250.6p after reporting a 0.8% fall in like-for-like sales in its first quarter to June 4.

This marked a set back after a 0.1% rise in the previous quarter, but was better than feared following recent disappointing market share data from Kantar Worldpanel.

Mike Coupe, chief executive of Sainsbury's, said: "Market conditions remain challenging.

"Food price deflation continues to impact our sales and pressures on pricing mean the market will remain competitive for the foreseeable future."

Falls among banking stocks and insurers weighed on the top tier, with Royal Bank of Scotland, down 4.3p to 225.4p.

Barclays and Prudential were also lower, off 2.2p to 178.1p and 6p to 1316p respectively.

WH Smith was 4% lower in the FTSE 250 Index as it reported flat sales in the 14 weeks to June 4 as buoyant trade across its shops in railway stations and airports was offset by tougher trading on the high street.

The stationer and newsagent said like-for-like sales rose 3% in its travel stores in the 14 weeks to June 4 thanks to rising passenger numbers at transport hubs.

But like-for-like sales fell 3% at high street stores, where the group is cutting costs and focusing on profit margins rather than growing sales.

The group said it remained "confident in the outcome for the full year".

It has been expanding its travel business in the UK and overseas and is looking to add further stores.

Shares were down 70p to 1670p.

The biggest risers on the FTSE 100 Index were Anglo American up 32p to 697.5p, Fresnillo up 48p to 1197p, Rangold Resources up 260p to 6535p, Glencore up 5.7p to 145.7p.

The biggest fallers were Intercontinental Hotels Group down 63p to 2666p, Dixons Carphone down 9.5p to 423p, easyJet down 31p to 1490p, Direct Line Insurance down 7.5p to 361.5p.

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