FTSE 100 rises as mining stocks make gains on stronger metal prices
Metal prices rose on the back of stronger data out of China.
The FTSE 100 rose on Wednesday as a rebound in metal prices sent mining stocks to the top of the blue chip index.
London’s top flight index ended the day up 0.3% or 22.84 points to 7,543.2 points, buoyed by the likes of Evraz up 23.4p to 476p, Anglo American up 54p at 1,757.4p, Glencore up 10.95p at 357.9p.
The sector was benefiting from stronger metal prices sparked by stronger data out of China and some relief over the state of global trade relations.
Jasper Lawler, head of research at London Capital Group, said: “Gains on the FTSE 100 were led by the mining sector.
“An uptick in Chinese manufacturing activity during April bodes well for industrial demand from the world’s biggest consumer. Basic resource shares as a group are bouncing back after being held down on concerns of a US-China trade war.”
The UK market was also buoyed by the release of the Markit/CIPS UK Construction purchasing managers’ index (PMI), which showed the industry rebounding in April after suffering the effects of wintry weather earlier in the year.
Activity rose to 52.5 last month, up from 47 in March, its fastest pace for five months, with residential house-building showing the strongest growth since May 2017.
Across Europe, the French Cac and German Dax rose 0.1% and 1.5%, respectively.
In currency markets, the pound was mixed, trading 0.1% lower against the US dollar at around 1.359 and rising 0.1% versus the euro to 1.136.
Brent crude prices slumped 1.2% to around 72.47 US dollars per barrel, after data from the Energy Information Administration showed a larger build up in oil and gas stockpiles in the US, reviving worries about a global glut.
In UK stocks, Paddy Power Betfair shares slumped 455p to 6,800p as investors reacted to flat first quarter revenues and an 8% fall in underlying earnings.
It came as punters reigned in their spending in reaction to a “sustained period of bookmaker-friendly sports results.”
Standard Chartered fell 7.9p to 761.4p as strong first quarter results – including a 20% rise in bottom line pre-tax profits – prompted profit taking by investors.
J Sainsbury shares were down 9.5p at 305p. The grocer’s boss Mike Coup responded to concerns raised by Labour MP Frank Field, saying its pending merger with Asda protected the long term interests of its pension scheme members.
Shares in Direct Line Insurance Group fell 10.5p to 365.8p, after revealing that claims caused by recent freezing temperatures were set to reach around £50 million on a post-tax basis.
It uses up most of the £55 million the insurer sets aside for major weather events per year within months.
Pendragon tumbled 1.55p to 28.3p on news that falling car sales and a shortage of used vehicles resulted in first quarter profits more than halving to £15 million.
News that Ocado had clinched its fourth international deal with Swedish supermarket group ICA sent its shares up 19.6p to end the day at 575p.
The biggest risers on the FTSE 100 were Evraz up 23.4p to 476p, Anglo American up 54p at 1,757.4p, Glencore up 10.95p at 357.9p, and Rio Tinto up 114.5p at 4,029p.
The biggest fallers on the FTSE 100 were Paddy Power Betfair down 455p at 6,800p, J Sainsbury down 9.5p at 305p, Direct Line Insurance Group down 10.5p at 365.8p, and Kingfisher down 5.7p at 290.6p.