London close: Mining shares, upbeat UK data boost equities

Mining giants Anglo American, Rio Tinto and BHP Billiton were among the biggest risers on the FTSE 100, driven by an increase in gold and copper prices and an upgrade from Morgan Stanley. The broker improved its stance on all three stocks, as it lifted its view on the European metals and mining sector to ‘attractive’ from ‘in line’.

UK manufacturing output climbed 0.5% month-on-month in August compared with a 0.8% decline in July and analysts’ expectations for a 0.3% gain, the Office for National Statistics revealed. The rebound was buoyed by increased car production.

Industrial output was up 1% month-on-month in August, ahead of forecasts for a 0.3% rise and following a 0.4% fall in July, boosted by a 6.0% gain in the mining and quarrying sector.

“The Bank of England is likely to take some comfort from August’s rebound in industrial production, but it will be concerned by the underlying weakness of manufacturing,” said Howard Archer, chief UK and European economist at IHS Global Insight.

“The data are unlikely to hugely change market belief that the Bank of England will not be raising interest rates before late-2016, although we believe a move in the first half of the year is still very likely and would not rule out a move in February."

The BoE will announce its latest policy decision along with its meeting minutes on Thursday, and the market will be looking for hints on the timing of the first interest rate increase.

NIESR said it does not expect the BoE to vote in favour of a rate rise this month, as it reported UK gross domestic product expanded 0.5% quarter-on-quarter in the three months to September, the same as the preceding three months.

“Economic growth remains reasonable and, although we do not expect the Bank of England’s Monetary Policy Committee to vote to raise rates at its October meeting, we continue to expect the first rise in Bank Rate in the first half of 2016.”

Elsewhere, Germany’s industrial production rose 2.3% year-on-year in August, missing analysts’ expectations for a 3.3% gain. Compared to the previous month output in August fell 1.2%, trailing estimates for a 0.2% rise.

Meanwhile, the Bank of Japan opted against extending its stimulus measures, even though its inflation target is under threat amid slumping exports and a decline in oil prices.

In company news, International Consolidated Airlines and EasyJet dropped on rising oil prices and a downgrade by Credit Suisse. “We can see the close correlation between airlines and the oil price, with much of their recent outperformance resulting from the renewed weakness in the oil price,” said Credit Suisse, as it cut its stance on European airlines to ‘benchmark’ from ‘overweight’.

Brent and West Texas Intermediate pared earlier gains, falling 0.02% to $51.91 per barrel and 0.6% to $48.24 per barrel, respectively. The dip came after weekly inventory data showed US stockpiles of crude oil and petroleum products at a new record high.

SABMiller was on the front foot as it rejected AB InBev's third formal bid of £42.15 per share, up from two initial offers of £38 and £40.

Tesco reversed an earlier decline after reporting a 55% drop in first half operating profit that was better than analysts had expected and after saying the supermarket is on track to make annual profits in line with last year.

Marks & Spencer slumped after JPMorgan Cazenove downgraded the stock to ‘neutral’ from ‘overweight’ and cut its price target to 550p from 600p.

Sports Direct fell after RBC Capital Markets downgraded the company to ‘sector perform’ from’outperform’ and cut its price target to 850p from 900p.

Market Movers

techMARK 3,013.88 -1.65%

FTSE 100 6,328.16 +0.03%

FTSE 250 17,019.25 -0.66%

FTSE 100 - Risers

Anglo American (AAL) 662.60p +9.67%

Antofagasta (ANTO) 574.50p +6.98%

Rio Tinto (RIO) 2,474.50p +6.94%

BHP Billiton (BLT) 1,106.00p +4.39%

Glencore (GLEN) 123.00p +4.37%

Aberdeen Asset Management (ADN) 340.20p +3.97%

Standard Chartered (STAN) 738.10p +3.36%

Centrica (CNA) 236.30p +2.78%

Royal Dutch Shell 'B' (RDSB) 1,812.00p +2.58%

Tesco (TSCO) 196.85p +2.45%

FTSE 100 - Fallers

International Consolidated Airlines Group SA (CDI) (IAG) 554.00p -5.54%

easyJet (EZJ) 1,667.00p -5.28%

Carnival (CCL) 3,284.00p -4.62%

Hikma Pharmaceuticals (HIK) 2,162.00p -4.34%

Sports Direct International (SPD) 742.00p -4.32%

TUI AG Reg Shs (DI) (TUI) 1,214.00p -4.26%

Marks & Spencer Group (MKS) 499.30p -3.89%

Shire Plc (SHP) 4,316.00p -3.77%

Smith & Nephew (SN.) 1,119.00p -3.62%

London Stock Exchange Group (LSE) 2,467.00p -3.41%

FTSE 250 - Risers

Vedanta Resources (VED) 505.00p +13.10%

Kaz Minerals (KAZ) 121.70p +11.75%

Evraz (EVR) 89.50p +9.55%

Rotork (ROR) 190.00p +8.63%

Tullow Oil (TLW) 240.70p +7.89%

Weir Group (WEIR) 1,393.00p +5.69%

Ophir Energy (OPHR) 104.70p +5.65%

Drax Group (DRX) 263.20p +5.28%

Petra Diamonds Ltd.(DI) (PDL) 97.30p +4.34%

Premier Oil (PMO) 86.80p +4.20%

FTSE 250 - Fallers

BTG (BTG) 548.00p -8.82%

Indivior (INDV) 215.80p -7.97%

Hays (HAS) 147.50p -5.08%

Man Group (EMG) 156.10p -4.82%

Rightmove (RMV) 3,590.00p -4.39%

Foxtons Group (FOXT) 229.60p -4.33%

Wizz Air Holdings (WIZZ) 1,909.00p -4.21%

B&M European Value Retail S.A. (DI) (BME) 327.60p -3.65%

Aldermore Group (ALD) 265.10p -3.60%

Stagecoach Group (SGC) 327.40p -3.56%

FTSE TechMARK - Risers

Consort Medical (CSRT) 939.00p +1.24%

CML Microsystems (CML) 350.00p +0.72%

SDL (SDL) 369.50p +0.61%

Oxford Instruments (OXIG) 617.00p +0.33%

Spirent Communications (SPT) 75.50p +0.33%

Dialight (DIA) 666.00p +0.30%

IShares Euro Gov Bond 7-10YR UCITS ETF (IEGM) € 203.07 +0.04%

FTSE TechMARK - Fallers

NCC Group (NCC) 256.00p -6.91%

DRS Data & Research Services (DRS) 12.00p -5.88%

Torotrak (TRK) 6.50p -3.99%

Filtronic (FTC) 6.75p -1.82%

Ricardo (RCDO) 888.50p -1.28%

BATM Advanced Communications Ltd. (BVC) 19.50p -1.27%

E2V Technologies (E2V) 237.50p -0.84%

KCOM Group (KCOM) 91.25p -0.82%

Oxford Biomedica (OXB) 7.75p -0.64%

XP Power Ltd. (DI) (XPP) 1,660.00p -0.60%