London close: Miners bolster equities as copper and oil prices rally

The FTSE 100 ended on a high note as oil and metals´ prices extended their recent rally, giving mining stocks a boost.

Miners Glencore, BHP Billiton, Antofagasta and Rio Tinto registered gains as copper prices jumped 2.07% and oil prices rose after the rich world’s oil watchdog said it expected a drop in production this year and next.

Easing concerns about the supply glut, the International Energy Agency said in its medium-term outlook on Monday that US shale oil production was expected to fall by 600,000 barrels per day (bpd) this year and another 200,000 bpd in 2017.

Brent crude climbed 4.4% to $34.53 per barrel and West Texas Intermediate surged 5.1% to $33.47 per barrel at 1619 GMT.

In economic data, China’s business confidence in February declined, fuelling hopes for further stimulus measures. The MNI China Business Sentiment Indicator fell for the second consecutive month to 49.9 in February from 52.3 in January as production dropped to a two-year low.

Earlier in the session, iron ore prices recovered to $50 a tonne, making for gains of almost 30% from their December lows, on indications for better demand in China´s construction and infrastructure markets and supply factors.

The DJ Stoxx 600´s Basic Resources gauge jumped 6.46%.

Meanwhile, the pound’s value plunged after London Mayor Boris Johnson’s surprise decision to back the campaign for Britain to leave the European Union. Prime Minister David Cameron slammed Boris in the House of Commons, accusing the politician of backing Brexit for his own personal leadership ambitions. The announcement from Johnson saw the pound tumble 1.92% against the US dollar - its largest single-day loss since 2009.

Jefferies said: “To date, there is no evidence (at least through the Bank of England agents) that the risk of Brexit is postponing investment intentions.

“In a ‘Brexit’ the UK would lose its credit rating and there would be more focus on the UK’s current account deficit and how that would be funded in a world where reserve managers held fewer Gilts. Sterling would undoubtedly fall.”

Elsewhere, Markit’s Eurozone manufacturing purchasing managers’ index fell to 51 in February from 52.3 in January, worse than the reading of 52 expected by analysts. However, a reading above 50 signals an expansion in sector activity.

Markit’s US manufacturing purchasing managers’ index fell to 51.0 in February from 52.4 in January. Analysts had expected no change. A reading above 50 signals expansion in sector activity while a level below that indicates a contraction.

In company news, HSBC shares declined after it reported full year profit that missed forecasts and predicted a “bumpier financial environment” ahead due to a slowdown in China.

Housebuilders were the biggest fallers including Berkeley Group, Taylor Wimpey, Barratt Developments and British Land. Citing research from Liberum, The Sunday Telegraph reported that the market is pricing in concerns of another recession as shares in housebuilders are down about 18% during the past six months.

Bovis Homes reversed earlier gains after reporting a jump in full year pre-tax profit and revenue as legal completions and prices rose and the housebuilder sounded an upbeat note on 2016.

Anglo American was on the front foot following reports that the company may sell De Beers’ London headquarters, which would be the end of an era for the world’s largest diamond company.

Home Retail advanced following media reports over the weekend that Sainsbury’s could seek an extension to the Takeover Panel’s 18 March deadline, after South African retailer Steinhoff made an offer to the Argos owner.

Primark owner Associated British Foods climbed as it said full year profits will be better than expected, supported by the recent weakening of sterling.

Market Movers

FTSE 100 (UKX) 6,038.45 1.48%
FTSE 250 (MCX) 16,286.46 0.79%
techMARK (TASX) 3,130.40 1.29%

FTSE 100 - Risers

Glencore (GLEN) 131.80p 11.32%
Anglo American (AAL) 483.75p 10.79%
BHP Billiton (BLT) 795.00p 8.55%
Rio Tinto (RIO) 2,051.00p 8.43%
Antofagasta (ANTO) 516.50p 7.49%
Standard Chartered (STAN) 436.30p 5.23%
BP (BP.) 356.85p 3.96%
Royal Dutch Shell 'A' (RDSA) 1,624.50p 3.93%
Ashtead Group (AHT) 879.00p 3.84%
Coca-Cola HBC AG (CDI) (CCH) 1,467.00p 3.82%

FTSE 100 - Fallers

Berkeley Group Holdings (The) (BKG) 3,200.00p -4.85%
Taylor Wimpey (TW.) 175.00p -4.74%
Barratt Developments (BDEV) 558.50p -4.45%
Persimmon (PSN) 1,973.00p -4.32%
Kingfisher (KGF) 330.50p -3.39%
British Land Company (BLND) 671.00p -3.10%
Next (NXT) 6,830.00p -2.50%
Sainsbury (J) (SBRY) 255.20p -2.26%
Land Securities Group (LAND) 1,013.00p -2.22%
Dixons Carphone (DC.) 440.20p -1.83%

FTSE 250 - Risers

Home Retail Group (HOME) 173.70p 13.09%
Dechra Pharmaceuticals (DPH) 1,168.00p 9.98%
Vedanta Resources (VED) 270.00p 7.87%
Millennium & Copthorne Hotels (MLC) 408.60p 7.81%
Drax Group (DRX) 257.80p 6.84%
esure Group (ESUR) 243.40p 4.87%
Morgan Advanced Materials (MGAM) 220.10p 4.86%
Amec Foster Wheeler (AMFW) 365.40p 4.49%
Cable & Wireless Communications (CWC) 75.90p 4.40%
Computacenter (CCC) 835.00p 4.38%

FTSE 250 - Fallers

Bellway (BWY) 2,498.00p -5.56%
Nostrum Oil & Gas (NOG) 262.10p -4.69%
CLS Holdings (CLI) 1,459.00p -4.33%
Poundland Group (PLND) 173.60p -4.30%
Sophos Group (SOPH) 205.10p -4.07%
Bovis Homes Group (BVS) 874.00p -4.01%
AO World (AO.) 173.20p -3.78%
Clarkson (CKN) 1,750.00p -2.83%
Redrow (RDW) 412.50p -2.74%
Ibstock (IBST) 200.00p -2.44%