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FTSE inches higher as miners rally

Published 28/12/2016, 12:36
© Reuters. A red London bus passes the Stock Exchange in London
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By Kit Rees

LONDON (Reuters) - UK shares gained on Wednesday, helped by a rally among mining firms which tracked commodities prices higher, though volumes remained thin in the final trading days of the year.

The blue chip FTSE 100 index (FTSE) was up 0.5 percent at 7,100.55 points by 1211 GMT, reaching its highest level since October.

Mining stocks (FTNMX1770) were the biggest gainers, up 3.5 percent and helped by a firmer oil price and a rally in copper, with which mining shares tend to be closely correlated. [MET/L]

BHP Billiton (L:BLT), Fresnillo (L:FRES), Rio Tinto (L:RIO), Anglo American (L:AAL) and Glencore (L:GLEN) were all up between 3.4 to 4.3 percent.

The British mining sector has rallied more than 100 percent in 2016, but has pulled back slightly after reaching a year-high earlier in December.

"Some of the other metals are actually showing negative for the day, but the fact that they look to have bottomed out in the run-in to Christmas and have held firm perhaps yesterday as well is a positive," Mike van Dulken, head of research at Accendo Markets, said.

"We were in a downtrend that started end of November, so if we can call the end to that, that will be good for (the miners)."

Among the top fallers, airlines International Consolidated Airlines (L:ICAG) and easyJet (L:EZJ) lagged, down 2.3 percent and 1.5 percent respectively, on worries sparked by news that French peer Airbus (PA:AIR) postponed deliveries of 12 A380 planes to Emirates Airline.

While the midcap FTSE 250 index (FTMC) also outperformed, also 0.5 percent higher, a 4.8 percent fall in Bovis Homes (L:BVS) pulled down shares in property stocks after the housebuilder issued a profit warning.

© Reuters. A red London bus passes the Stock Exchange in London

Sector peers Crest Nicholson (L:CRST) and Berkeley Group (L:BKGH) dropped 2.5 percent and 1.3 percent respectively.

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