Alexander Bueso Sharecast News

18 Nov, 2015 16:59 18 Nov, 2015 17:33

London close: Stocks edge higher buoyed by bottom-fishing in miners

The top flight index edged higher, with investors brushing off hawkish remarks from a spate of US central bankers ahead of the release of the minutes of the US Federal Reserve's policy meeting in October.

Antofagasta

1,653.50p

15:45 15/11/24

1.07%

17.50p

FTSE 100

8,060.61

15:45 15/11/24

n/a

FTSE 250

20,508.75

15:45 15/11/24

n/a

FTSE 350

4,453.56

15:45 15/11/24

n/a

FTSE All-Share

4,411.85

15:45 15/11/24

n/a

Glencore

378.00p

15:45 15/11/24

0.88%

3.30p

Hunting

304.50p

15:30 15/11/24

1.00%

3.00p

Mining

10,633.77

15:45 15/11/24

1.51%

158.40

Oil Equipment, Services & Distribution

4,928.34

16:30 25/09/24

0.00%

0.00

In all, on Wednesday afternoon four members of the Fed indicated to a greater or lesser extent that the US economy was now able to take a first interest hike in its stride.

Despite that, the Footsie tacked on another 10.21 points or 0.16%, seeing the day off at 6,278.97.

In more practical terms, and as far as stocks are concerned, on Tuesday Investec lowered its price targets for several miners, including Glencore, on the basis that falling commodity prices because of the slowdown in China and expectations for rising US interest rates, together with increased costs of financing were leaving debt-laden companies more and more exposed.

However, on Wednesday a positive note on Antofagasta from Goldman Sachs appeared to trigger some interest in the sector.

Commodities continued to face selling pressure. Three-month copper futures on the LME ended the session down by 1.1% to $4,634 per metric tonne while Brent futures drifted lower by 1.23% to $40.17 per barrel on the NYMEX.

At last count, Fed funds futures were putting the chances of a Fed rate hike in December at 66%.

The yield on the benchmark 10-year Gilt was lower by five basis points to 1.93%, following a sale earlier in the day of £3.25bn in new debt of the same maturity by the Treasury.

Commenting on the speculation surrounding the timing of the first increase in rates, but in the UK, Deputy Bank of England Governor Ben Broadbent cautioned investors not to obsess with market-based pricing, adding that the BoE’s quarterly inflation reports were only meant to serve as a guide of sorts and not predictions.

As regards the potential impact of the Paris attacks on economic activity, US Richmond Fed president Jeffrey Lacker said he was keeping his “fingers crossed” but went on to add that such things tend to be transitory.

To an extent, his words echoed those of ECB executive board member Yves Mersch overnight.

On a more cautious note, the ECB’s chief economist reportedly said that “the main issue is the economic context of such events, which is a rather difficult one, we cannot deny that. We are also very well aware that downside risks are present and even that they may have increased in light of the weekend's events."

Indeed, an auction of two-year German government debt on Wednesday drew a yield of -0.38% - the lowest since the Second World War.

On the geopolitical front, President Obama reportedly said he would welcome military cooperation with the Kremlin in Syria if Russia shifts the focus of its attacks onto ISIS.

Antofagasta, Hunting pace gains thanks to broker commentary

Goldman Sachs upgraded Antofagasta to ‘neutral’ from ‘sell’ with an unchanged price target of 440p, saying the risk/reward is now balanced. GS noted that since being added to the ‘sell’ list in February, the stock was down 35% versus the FTSE World Europe down 8.3%.

Oil service group Hunting also got a boost on Wednesday thanks to positive comments also out of Goldman Sachs which reiterated its ‘buy’ rating on the stock, adding it to its ‘conviction list’ and saying that the valuation offers a good buying opportunity.

Hikma Pharmaceuticals said it had overcome concerns raised by the US Food and Drug Administration (FDA) over environmental monitoring issues at its Portugal plant. The FDA in October 2014 sent the company a "warning letter" flagging issues the issues. In a statement, Hikma said it had received a further letter from the FDA "closing out" the warning letter from last year. JP Morgan reiterated its overweight recommendation and 2,500p target on the shares.

Informa announced it is disposing of its two Dutch conference businesses. The FTSE 250 company announced its plans on Wednesday. The company will get rid of the two businesses based in Amsterdam and Eindhoven, as well as a small local publishing operation. The disposals are part of the company’s portfolio management strategy. It follows the recent disposal of its two Scandinavian businesses in Sweden and Denmark, as well as the previous sale of its Consumer Information business and the closure of operations in Johannesburg and Melbourne.

LondonMetric Property acquired a 230,000 square ft distribution warehouse from a private vendor for £28.8m, which will be funded from existing resources, reflecting a net initial yield of 5.8%. The warehouse is situated in a prime distribution location on a 11.5 acre site in Reading, next to Junction 11 of the M4, and close to Tesco's 1mn sq ft regional hub. Other companies nearby include Royal Mail and Proctor & Gamble.

UK insurer Hastings Group Holdings, which listed on the London Stock Exchange in October, posted a 19% rise in operating profit for the first nine months of the year, as gross written premiums advanced.

Earnings at HICL Infrastructure were down significantly in the six months to 30 September 2015, the company reported on Wednesday morning. Its interim results shows income of £84.4m, down from £142.3m in the corresponding period last year. Profits were down too, from £132m last year to £71.7m for this period.

Market Movers

FTSE 100 (UKX) 6,278.97 0.16%
FTSE 250 (MCX) 17,089.09 0.03%
techMARK (TASX) 3,148.55 0.10%

FTSE 100 - Risers

Antofagasta (ANTO) 500.00p 5.84%
Glencore (GLEN) 93.31p 5.04%
Hikma Pharmaceuticals (HIK) 2,046.00p 4.76%
Anglo American (AAL) 449.45p 4.28%
Pearson (PSON) 812.00p 2.92%
Coca-Cola HBC AG (CDI) (CCH) 1,599.00p 2.83%
Fresnillo (FRES) 689.00p 2.53%
Rio Tinto (RIO) 2,260.50p 2.10%
Sainsbury (J) (SBRY) 253.60p 2.09%
Aberdeen Asset Management (ADN) 337.20p 1.72%