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FTSE advances, breaking losing run

Published 04/04/2016, 13:17
© Reuters. People walk through the lobby of the London Stock Exchange in London
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By Kit Rees

LONDON (Reuters) - British shares edged higher on Monday as commodities-related stocks shrugged off declines in copper and oil prices, helping the index to gain for the first time this quarter.

Britain's blue-chip FTSE 100 index (FTSE) was up 50.01 points, or 0.8 percent at 6,196.06 points by 1138 GMT, lagging the broader European market.

The index was poised to snap a two-session losing run, which had seen it close out the first quarter with a 1.1 percent fall to start 2016.

Monday's rise more than recouped a 0.5 percent drop in the previous session, the first trading day of the second quarter.

However, the index remained in a range of around 200 points which has persisted since the start of March, and volumes were thin, with just a quarter of 90-day average volumes traded, halfway through the session.

Miner Rio Tinto (L:RIO) led the gainers on the FTSE 100 index, up 2.7 percent, with analysts citing a supportive rise in the price of iron ore during the Asian session.

Miners Anglo American (L:AAL), Glencore (L:GLEN) and BHP Billiton (L:BLT) shrugged off a decline in copper prices and concerns over Chinese demand, although some investors were expecting the sector to remain volatile.

"Given the fact that we probably are expecting to see a stronger U.S. dollar and weaker growth globally, then these basic metals will likely continue to be problematic and cut into profit margins," said Brenda Kelly, head analyst at London Capital Group.

Travel and leisure stocks also gained, with budget airline easyJet (L:EZJ) 0.6 percent higher after Irish-listed Ryanair Holdings (I:RYA) posted a jump in March traffic figures.

British Airways owner IAG (L:ICAG) rose 1.7 percent and mid-cap Wizz Air (L:WIZZ) advanced 3.5 percent, with analysts citing a weaker oil price as also supporting the sector.

Retailer Marks and Spencer (L:MKS) was among the FTSE 100's top risers, up 1.5 percent after broker Peel Hunt upgraded its rating to "buy" from "hold" and raised its target price.

Worldpay Group (L:WPG) rose 2.3 percent, with its shares rebounding after a 10 percent droup in the first quarter.

The payments processing firm had been under pressure after in-line results last month disappointed a market that had hoped for more, but traders said that fundamentals remained strong.

"Markets were uninspired by what management described an ‘in-line’ start to 2016 and thus less bullish than shareholders had been hoping for ... (however) the fundamentals for the company are ... pretty solid as we move towards a cashless society," said Mike van Dulken, head of research at Accendo Markets.

Paper and packaging company Mondi (L:MNDI) fell 2 percent after the Federal Antimonopoly service of the Russian Federation said it had initiated an investigation into Mondi Syktyvkar over the pricing of offset paper.

Mondi said it had not yet received any FAS notification.

© Reuters. People walk through the lobby of the London Stock Exchange in London

Downgrades by investment bank Credit Suisse (SIX:CSGN) weighed on car insurer Admiral Group (L:ADML) and Rolls-Royce Holdings (L:RR), which fell 0.7 percent and 0.4 percent respectively.

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