January 29, 2018 / 10:05 AM / 2 years ago

Miners and oil companies fuel gain for FTSE

LONDON (Reuters) - Britain’s top share index pulled ahead of sluggish European markets on Monday thanks to its strong cyclical tilt as mining and oil stocks powered higher.

FILE PHOTO - A man walks through the lobby of the London Stock Exchange in London, Britain August 25, 2015. REUTERS/Suzanne Plunkett

The FTSE 100 .FTSE ended the session up 0.1 percent at 7,671.53 points, while the FTSE 250 .FTMC slipped by 0.2 percent.

On a light day for earnings statements, with investors awaiting a heavy slate of results later in the week, moves were muted as cyclical strength drove the market higher.

Miners were the biggest boost to the FTSE as metals prices extended their run, with zinc at a ten-year high. [MET/L]

Glencore (GLEN.L), Rio Tinto (RIO.L), Anglo American (AAL.L), Antofagasta (ANTO.L) and BHP Billiton BLT.L rose by between 1.1 percent and 3.3 percent.

Energy stocks also drove gains, rising as crude prices remained supported by OPEC-led production cuts.

“We have seen multi-year highs being reached in oil and platinum recently, and copper and palladium have been robust, too, and this is playing into the natural resources stocks,” said David Madden, market analyst at CMC Markets UK.

Sub-prime lender Provident Financial (PFG.L) fell 3 percent, among the worst-performing stocks on the mid-cap index, after four of its former executives raised employment tribunal claims for unfair dismissal.

Elsewhere broker notes moved some shares.

Smurfit Kappa (SKG.L) rose 1.5 percent after Numis raised its target price on the stock.

Diageo (DGE.L), meanwhile, retreated more than 1 percent after a rating downgrade from RBC.

“There’s plenty of scope for both working and fixed capital to be managed more tightly, but we think investment will be less aggressively curtailed than we previously anticipated,” RBC analysts said.

Among small-caps, Petra Diamonds (PDL.L) sank 18.5 percent after the diamond mine operator warned on profit and cut its 2018 production forecast.

The profit warning comes after a three-week strike at its South African operations and the blocking of a consignment of diamonds in Tanzania that led the company to flag a possible breach of two of its debt covenants in October.

“The company still has sufficient liquidity, we think, but until we see a deleveraging on the balance sheet, financing concerns will continue to weigh,” said RBC analysts.

Reporting by Helen Reid and Kit Rees; Editing by David Goodman

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