3 Min Read
LONDON (Reuters) - British shares edged higher on Wednesday, extending gains from the previous session as heavyweight mining and oil stocks rallied, while support services firm DCC also gained after agreeing to buy a business in Hong Kong and Macau.
The blue chip FTSE 100 index ended up 0.1 percent, outperforming the broader European market thanks to its large proportion of resources-related stocks.
Miners were among the standout performers, with BHP Billiton and Antofagasta both gaining more than 1.5 percent as copper prices traded higher.
BHP Billiton, the world's biggest exporter of coal for making steel also saw support after declaring force majeure for coal deliveries from its mines in Australia's Bowen Basin after a cyclone damaged railway lines.
Disruption from Cyclone Debbie has spurred worries of tighter supply, sending coking coal futures higher.
Oil stocks also lent support, but they pared some gains after crude prices eased from one-month highs, as support from an outage at the largest UK North Sea oilfield was offset by a surprise increase in U.S. crude inventories.
BP and Royal Dutch Shell rose 0.7 and 0.3 percent respectively. Even though they came off earlier highs, energy stocks remained the biggest contributor to gains in the FTSE.
DCC was also among the biggest gainers, ending up 1.7 percent and trading close to record highs after agreeing to buy Royal Dutch Shell's liquefied petroleum gas (LPG) business in Hong Kong and Macau for an enterprise value of $145 million.
"It ... provides a good platform for further growth in the Asian LPG market as it pursues its strategy to be a global leader in its industry," analysts at UBS said in a note.
South Africa-exposed insurer Old Mutual was the biggest FTSE loser, down 4.4 percent, tracking a further fall in the rand after the ruling African National Congress Party (ANC) rejected calls for President Jacob Zuma to quit.
Specialty chemicals company Croda dropped 3.6 percent after Credit Suisse downgraded its rating to "underperform" from "neutral".
"We believe Croda shares are trading at a premium to fair value given operational headwinds in 2017 and structural long-term pressure in Personal Care as the business lifecycle matures," analysts at Credit Suisse said in a note.
Outside of the blue chips, shares in Allied Minds lost a third of their value in their biggest one-day loss on record after the tech and life sciences-focused incubator cut funding for seven of its portfolio companies.
Reporting by Kit Rees; Additional reporting by Danilo Masoni; Editing by Alison Williams and Mark Potter