FTSE 100 movers: Mining bears outweigh construction bulls

London's blue chips were on the back foot as the week came to a close, weighed down as the miners continued to lose ground for a second session and despite oil prices launching a new move higher.

Household Goods & Home Construction

11,411.74

16:38 14/11/24

1.23%

138.55

Travis Perkins

805.00p

16:39 14/11/24

1.26%

10.00p

After the European Central Bank's tough-talking stance on Thursday, miners were being sold down due to the higher dollar.

"Strength in the Greenback - thanks to ECB President Mario Draghi finally succeeding in talking the Euro down, even if only marginally - is also weighing on the dollar-denominated commodities space and the miners," said Mike Van Dulken at Accendo Markets.

Glencore led the fallers, with Anglo American and Rio Tinto both among the main losers.

BHP Billiton's management also said overnight that they did not expect recent rise in iron ore and metallurgical coal prices to hold for more than a few months, as more low cost supply is set to hit the market.

Paddy Power Betfair also continued to traipse lower for the third successive day after negative comments on the newly merged bookmaker from Credit Suisse earlier in the week.

The Swiss bank initiated coverage of PPB at ‘underperform’ with a 8,650p price target, saying the merger benefits were being overplayed, with the cost synergies and scale failing to justify the share price.

Land Securities and British Land were also lower as the Telegraph's Questor column highlighted Jefferies managing director Mike Prew's negative case.

The Jefferies real estate guru noted that demand is drying up due to the waning buying power of petrodollar-rich sovereign wealth funds oil prices and REIT investor outflows at the fastest rate since 2008, which together are butting heads with a tsunami of supply that is about to hit the market.

"In the London market there is 26m sq ft of new office space due for completion within the next four years. That is the staggering equivalent of 40 new Gherkins in four years. The UK economic recovery that has been behind steadily rising rents is also running out of steam... Time to sell," the newspaper tipster column thundered.

Of the risers, construction plant hire group Ashtead was in the lead. Ahead of an investor seminar on Friday outlined expectations as towards the top of consensus range, with chief executive Geoff Drabble of Ashtead saying: "As the group has grown it has become larger and more diversified, and this will deliver higher returns and greater stability across the cycle."

In a note to investors, Deutsche Bank reiterated its 'sell' rating on Ashtead, however, as it remains cautious on pricing and that slowing growth in US non-residential construction over the next two years will likely drive a continued de-rating of the stock.

The residential construction sector was also building momentum, thanks in part to a positive note on the builders from broker Liberum, which upgraded Barratt Developments and Persimmon to 'hold' as it toned down its caution on the sector.

Having come over all of a quiver on housebuilders in November due to stretched valuation and fears of margin pressure, Liberum was feeling more relaxed on the sector after its shares since subsided 13% due to worries about Brexit and prime London property.

While margin pressure remains a threat and not all Brexit risks are priced in, the broker sees valuations as "much more accommodating" now.

With most exposure to upmarket London, Berkeley was kept at 'hold', with its risks felt to be much more balanced after its shares' underperformance and the potential for the biggest bounce if Brexit is averted in June.

Sainsbury's was another riser as investors took more heed to Deutsche's bullish opinion this time.

Analysts upgraded the supermarket to 'buy' from 'hold' due to the expected benefit to earnings from the pending Argos acquisition and its reduced level of price promotions, saying investors seemed reluctant to factor-in the likely earnings accretion due to fears about execution risk.

Market Movers

FTSE 100 (UKX) 6,320.01 -0.96%
FTSE 250 (MCX) 16,951.98 -0.16%
techMARK (TASX) 3,131.28 -0.70%

FTSE 100 - Risers

Ashtead Group (AHT) 905.50p 1.63%
Sainsbury (J) (SBRY) 293.30p 1.56%
Travis Perkins (TPK) 1,831.00p 1.38%
Berkeley Group Holdings (The) (BKG) 2,925.00p 1.14%
Barratt Developments (BDEV) 515.50p 1.08%
Whitbread (WTB) 3,920.00p 1.00%
Persimmon (PSN) 1,896.00p 0.74%
Tesco (TSCO) 185.80p 0.43%
Kingfisher (KGF) 362.40p 0.28%
BT Group (BT.A) 435.35p 0.14%