FTSE 100 movers: Miners gain as metals prices rally; Fresnillo shines
London’s FTSE 100 index was up 0.4% to 6,380.06 in afternoon trading, with heavily-weighted miners pacing the advance.
Silver miner Fresnillo was the standout gainer as silver prices hit a 10-month high. Other mining stocks also racked up healthy gains as gold and base metals prices rose, with BHP Billiton, Antofagasta, Glencore and Anglo American all sharply higher.
“The metals complex is flying, aided by the weaker dollar and also apparently because base metal buying is considered a decent hedge against the Chinese yuan,” said Brenda Kelly, head of analysts at London Capital Group.
“Despite all the apparent risk on sentiment, silver prices are surging with gold prices also taking upside cues. The price ratio is now at a 2016 low. Silver’s greater industrial use means it is more sensitive to the industrial cycle and potentially less of a haven than gold. Over the long term (100 years) the ratio has gone below 20 three times and neared 100 twice, so silver does look cheap relative to gold in some respects.”
Glencore also gained as Societe Generale lifted its price target on the stock to 160p from 100p to reflect changes to long-term commodity price assumptions, operating costs and valuation methodology.
Still, the bank kept its ‘hold rating on the stock.
“The company seems on track to deliver on its debt reduction objectives, but this progress may be insufficient to support the rally as the worries about the global economy did not completely disappear.
“What is holding the share price from advancing further now is the lack of broad-based momentum in commodities,” it said.
On the downside, tour operator TUI was on the back foot, giving back some of the gains it made in the previous session after Berenberg upgraded the stock to ‘buy’ from ‘hold’ and nudged the price target up to 105p.
Paddy Power Betfair slipped, resuming the previous day’s decline as the bookmaker’s annual report revealed it paid former chief executive Andy McCue over €3.7m in 2015 in salary, benefits and shares.
The company paid McCue $3.72m in 2015, which included a salary of €700,000, a €536,000 bonus and €173,000 in pensions and benefits. He also received €2.3m in shares.
Risers
Fresnillo (FRES) 1,054.00p 4.15%
BHP Billiton (BLT) 948.80p 3.54%
Ashtead Group (AHT) 844.50p 3.37%
Antofagasta (ANTO) 472.80p 3.19%
Standard Chartered (STAN) 538.40p 2.94%
Glencore (GLEN) 162.55p 2.85%
GKN (GKN) 294.20p 2.76%
Anglo American (AAL) 711.90p 2.64%
Intu Properties (INTU) 300.40p 2.42%
Royal Bank of Scotland Group (RBS) 242.60p 2.15%
FTSE 100 - Fallers
Mediclinic International (MDC) 909.50p -2.57%
TUI AG Reg Shs (DI) (TUI) 1,043.00p -2.07%
Paddy Power Betfair (PPB) 9,350.00p -1.84%
Royal Dutch Shell 'A' (RDSA) 1,775.00p -1.61%
Marks & Spencer Group (MKS) 435.70p -1.54%
Royal Dutch Shell 'B' (RDSB) 1,779.50p -1.41%
CRH (CRH) 2,013.00p -0.84%
RSA Insurance Group (RSA) 469.90p -0.72%
London Stock Exchange Group (LSE) 2,770.00p -0.72%
GlaxoSmithKline (GSK) 1,500.00p -0.66%