FTSE 100 movers: Miners gain on dollar weakness; Pearson drops on downgrade

London’s FTSE 100 index was up 1.4% to 6,928.33 in afternoon trade as investors digested the Federal Reserve’s decision to keep rates on hold and signals a hike was likely by the end of the year.

Mining stocks got a boost as the dollar declined on the Fed’s decision not to move on rates. Glencore, BHP Billiton, Fresnillo, Antofagasta, Rio Tinto and Anglo American were all sharply higher as a weaker dollar makes greenback-denominated commodities more affordable for holders of other currencies.

Glencore also benefited from an upgrade to ‘hold’ from ‘sell’ by Liberum on the back of improved prospects for thermal coal prices.

On the downside, education publisher Pearson declined after Exane BNP Paribas downgraded the stock to ‘neutral’ from ‘outperform’ and cut the price target to 900p from 1,000p saying it fears more turbulence ahead.

The bank said that after last year’s shock profit warning, Pearson has needed to deliver on expectations to rebuild confidence. However, the US higher education courseware market looks weather-than-expected despite signs of an improvement in enrolment over the summer.

“This raises the risk of a further setback at the Q3 results,” it said.

Exane cut its 2016 earnings per share estimate by 6% and its 2017 forecast by 5%, saying it was concerned consensus might have to revise 2016 forecasts lower following the third-quarter results.

Premier Inn and Costa owner Whitbread was under the cosh as UBS reiterated its ‘neutral’ rating on the stock and assessed whether Costa can crack the Chinese market.

The bank said Costa was “not as well positioned as Starbucks, UBC, or McDonald's with lower awareness score, and less loyalty among its customer base".

In its report, the bank discussed whether Costa can 'crack' the Chinese market, concluding that in order to gain share there are some measures the company would need to address.

“Costa should invest in the brand, promotions/discounts, and a loyalty program to drive greater mind-share with consumers. The data also suggests that focusing on getting more 'desirable locations' could have a disproportionately positive impact for Costa.”

Risers

Glencore (GLEN) 208.10p 5.58%
BHP Billiton (BLT) 1,105.50p 5.19%
Fresnillo (FRES) 1,790.00p 4.50%
Antofagasta (ANTO) 517.00p 4.21%
Rio Tinto (RIO) 2,511.50p 4.17%
Randgold Resources Ltd. (RRS) 8,000.00p 4.17%
TUI AG Reg Shs (DI) (TUI) 1,089.00p 3.81%
Anglo American (AAL) 918.00p 3.30%
Burberry Group (BRBY) 1,411.00p 3.14%
BP (BP.) 437.10p 3.02%

Fallers

Whitbread (WTB) 3,955.00p -1.20%
HSBC Holdings (HSBA) 582.70p -1.02%
Shire Plc (SHP) 5,197.00p -0.92%
Pearson (PSON) 776.50p -0.70%
Hikma Pharmaceuticals (HIK) 2,103.00p -0.47%
ITV (ITV) 193.90p -0.46%
Informa (INF) 728.00p -0.34%
Direct Line Insurance Group (DLG) 382.80p -0.34%
Barratt Developments (BDEV) 483.50p -0.29%
Travis Perkins (TPK) 1,573.00p -0.19%