FTSE 100 movers: Gold producers rise while metals slide further
The FTSE 100 was trading choppily on Friday afternoon, as investors digested a lower-than-expected nonfarm payroll reading for April from the US.
Randgold Resources was a top riser after receiving its ‘hold’ rating reiterated by analysts at Deutsche Bank on Thursday. The report noted a target price of 5,560p on Randgold’s shares, which at the time gave the stock a potential 4.63% downside. Shares in Randgold rose slightly on Thursday, before turning higher still in Friday trading.
The firm had come under pressure earlier in the week after admitting that its Loulo-Gounkoto Project in Mali carried it to first quarter profit while commissioning and technical issues plagues its Kibali and Tongon mines. Investors seemed pleased that profit had risen 19% in the first quarter despite the setbacks in the latter part of this week.
Another riser on Friday was Fresnillo, which was the subject of a reiteration from JP Morgan Cazenove as ‘overweight’ on Thursday. The analysts slapped an 1100p target price on the stock, which indicated a potential upside of 6.18% at the time.
On Tuesday, the Mexico-focused gold producer indicated at its AGM that it was looking to cut back on exploration and investment as volatility in the commodities sector continues. At the meeting, Fresnillo said it was well on track to hit gold and silver targets by 2018, but it had to revise its spending in the interim.
Other stocks still feeling the positive effects of news earlier in the week included BAE Systems, which held its AGM on Thursday where it told shareholders it expected earnings to rise by as much as 10% this year, and Direct Line Insurance, which on Wednesday reported a 4.2% uptick in gross written premiums in the first quarter. The operator of the Green Flag brand also had its ‘buy’ rating retained by Deutsche Bank on Thursday.
Shares in satellite communications firm Inmarsat were again falling closer to earth on Friday, after it admitted this week that full-year revenue was likely to fall short of forecasts as a result of the muted conditions in the energy and maritime sectors - two key markets for the company.
In the update, the firm said revenues were likely to fall by 5% over 2016 with earnings before interest, tax, depreciation and amortisation dropping 3%. Inmarsat did fall 7% after that announcement.
Miner and commodities trader Glencore was another faller, after it was revealed to be in talks to sell a further 9.9% stake in its agricultural division. Glencore was not commenting on the rumours, but it was understood the firm was in talks with bidders who were after some of the 40% that ended up being sold to Canada Pension Plan Investment Board.
On Tuesday, the group revealed it was also exploring options for its biggest gold mines - the Vasilkovskoye project in Kazakhstan - which could include a sale worth up to $2bn.
Sinking metal prices saw a number of producers feature in the losers list as well - copper was last down 0.16% on Comex, with three month copper, aluminium, zinc and tin all losing out on the London Metals Exchange as well.
Shares in Anglo-American, Rio Tinto, Antofagasta and BHP Billiton were all trending downwards in afternoon trading.
FTSE 100 - Risers
Randgold Resources Ltd. (RRS) 6,050.00p 4.58%
Fresnillo (FRES) 1,074.00p 3.37%
Berkeley Group Holdings (The) (BKG) 2,948.00p 1.76%
Compass Group (CPG) 1,240.00p 1.47%
Rolls-Royce Holdings (RR.) 639.00p 1.43%
Direct Line Insurance Group (DLG) 377.20p 1.34%
SSE (SSE) 1,494.00p 1.22%
Barratt Developments (BDEV) 528.00p 1.15%
Merlin Entertainments (MERL) 432.20p 1.12%
British Land Company (BLND) 727.00p 1.11%
FTSE 100 - Fallers
Inmarsat (ISAT) 810.50p -6.08%
Glencore (GLEN) 140.50p -3.40%
Anglo American (AAL) 634.90p -3.01%
ITV (ITV) 217.90p -2.33%
Standard Chartered (STAN) 497.85p -1.80%
HSBC Holdings (HSBA) 429.95p -1.51%
Experian (EXPN) 1,248.00p -1.50%
BT Group (BT.A) 444.30p -1.50%
Antofagasta (ANTO) 436.00p -1.42%
Worldpay Group (WI) (WPG) 258.20p -1.41%