🥇 First rule of investing? Know when to save! Up to 55% off InvestingPro before BLACK FRIDAYCLAIM SALE

FTSE steadies as stronger miners offset weaker oils

Published 08/02/2017, 10:44
Updated 08/02/2017, 10:50
© Reuters. FILE PHOTO:  A man walks through the lobby of the London Stock Exchange in London
UK100
-
BP
-
SHEL
-
HRGV
-
RIO
-
AAL
-
TLW
-
ANTO
-
RR
-
FTNMX551030
-
FTNMX601010
-
GLEN
-
STOXX
-

By Atul Prakash

LONDON (Reuters) - Britain's top share index steadied on Wednesday, underperforming European peers, with a drop in energy stocks on the back of weaker oil prices offsetting a mining sector rally.

The blue-chip FTSE 100 index (FTSE) was flat in percentage terms at 7,188.20 points by 1006 GMT, after closing marginally higher in the previous session. In contrast, the pan-European STOXX 600 index (STOXX) was trading 0.6 percent higher.

Rio Tinto (L:RIO) rose 1.8 percent after the world's No. 2 iron ore miner beat profit forecasts on the back of cost-cutting and a strong recovery in iron ore prices and said it will pay a bigger-than-expected annual dividend.

"All the dials seem to be moving in the right direction at Rio, mainly thanks to the self-help measures implemented by the company," Hargreaves Lansdown (LON:HRGV) analyst Laith Khalaf said.

"Mining companies are price-takers, and have no control over commodity markets, but Rio has made ground by cutting cash costs and scaling back the dividend."

Rio shares have more than doubled since early 2016.

The UK mining index (FTNMX1770) rose 1 percent, also supported by a 1.5 percent-1.6 percent rise in Antofagasta (L:ANTO), Anglo American (L:AAL) and Glencore (L:GLEN) shares.

Rolls-Royce (L:RR) rose 2.6 percent to 718 pence, making it the top gainer in the FTSE 100, after JP Morgan raised its target price to 740 pence from 730 pence and increased its 2016 earnings per share forecast by 11 percent.

However, gains were negated by weaker energy stocks.

The UK oil and gas index (FTNMX0530) fell 1.3 percent, making it the biggest sectoral decliner, after oil prices extended Tuesday's falls following a massive increase in U.S. fuel inventories and a slump in Chinese demand. [O/R]

"Energy shares have been weighed on by a surprisingly large U.S. API oil inventory build stoking fears that rising U.S. shale production will outweigh OPEC cuts deigned to rebalance the global oil market," Accendo Markets analyst Henry Croft said.

© Reuters. FILE PHOTO:  A man walks through the lobby of the London Stock Exchange in London

Shares in Royal Dutch Shell (L:RDSa) and BP (L:BP) fell 1.6 percent and 0.5 percent respectively, while mid-cap Tullow Oil (L:TLW) was nearly 5 percent down.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.