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FTSE 100 rallies, taking its lead from buoyant Wall Street

Taking its lead from Wall Street, the Footsie moved gently into positive territory

Share prices rose
The UK stock market staged a comeback in the afternoon, holding on to Wall Street's coat-tails

UK's blue-chips rallied in the afternoon session, taking their lead from Wall Street, to push the Footsie gently into positive territory.

The FTSE 100 index finished 13 points higher at 6,151, having fallen as low as 6,092 at one point during the day.

Mining stocks were largely responsible for the top-share index's positive showing, though supermarket giant Tesco PLC (LON:TSCO), up 3.1%, did its bit too, as brokers picked the bones out of its annual report, published last Friday.

In the mid-cap space, Lonmin PLC (LON:LMI) was a stand-out, rising almost one-fifth as it bragged about the success of its cost-cutting campaign.

Stocks on the junior market did not quite replicate Footsie's recovery, although the FTSE Aim All-Share closed just 0.2 points lower at 724. The FTSE Aim 100 was down a couple of points at 3,383.

Chinese lottery ticket seller DJI Holdings PLC (LON:DJI) put on a late spurt after the results of its general meeting came through. The shares rose 7.8% to 110.5p as all resolutions were passed.

Georgia Healthcare Group PLC (LON:GHG) motored 7.7% higher to 210p as it launched a new ambulatory clinic in Tbilisi. The ambulatory clinic is the beginning of a new cluster, located in the Mtatsminda neighbourhood, and covers a population of around105,000.

KEFI Minerals plc (LON:KEFI) climbed 6.9% to 0.55p at its Tulu Kapi gold mine received US$20mln of backing from the Ethiopian government.

“The financial support of the Ethiopian Government provides concrete evidence of its support for the development of Tulu Kapi and a guide to project value," said KEFI's house broker SP Angel.

Sector peer Amur Minerals Corp (LON:AMC) also received a show of support, albeit more modest.

The nickel-copper sulphide mineral exploration and resource development company focused on the far east of Russia has been informed that Crede CG III Ltd has a 3.59% stake in the company.


Mid-session

London shares were off the pace despite a boost for oil prices from Goldman Sachs.

The FTSE 100 index was down 21 points at 6,117 by lunchtime, despite oil majors benefiting from higher Brent crude prices, after the broker said over-supply issues were waning.

“Analysts pointed to the steps taken to cut production, and unforeseen tragedies like the raging wildfires in Canada, as the main reasons why the oil glut has begun to decrease,” noted Connor Campbell at foreign exchange trading platform Spreadex.

Miners advanced briskly despite more evidence that growth in the Chinese economy is slowing down; investment, factory output and retail sales figures released on Saturday all undershot expectations.

Despite this, metal prices have hardened as China's central bank signalled its intention to continue with policies that would support growth in the People's Republic.

Mid-cap miner Lonmin PLC (LON:LMI) was the best performer in the sector, climbing 19% to 194p after an upbeat trading statement in which it said cost savings were well ahead of schedule.

The company had net cash of US$114mln at the end of March, versus net debt of US$185mln six months earlier.

Stocks on London's junior market also got off to a subdued start, with the FTSE Aim All-Share down 0.3 at 724.2 and the FTSE Aim 100 4.8 points in the hole at 3,380.

Could Gulf Keystone Petroleum Limited (LON:GKP) be about to give an update on its debt restructuring? There was no news from the company on Monday, but the shares were up nearly 30% at 5.7p.

It said at the end of last month that it had agreed a debt standstill ahead of a more permanent debt restructuring.

Broker Mirabaud believes a restructuring deal is likely to involve a debt for equity swap and some form of capital injection.

Plaza Centers N.V. (LON:PLAZ) was wanted, rising nearly 23% to 3.4p after it sold its 50% stake in the Riga Plaza shopping and entertainment centre in Riga, Latvia, for around €93.4mln.

Union Jack Oil PLC (LON:UJO) carried the standard for small-cap oil producers, climbing 19.2% to 0.16p after its full-year results.

The company said it expects to make more acquisitions to further bolster its portfolio of onshore UK oil and gas assets. Underpinning its plans is an 8% stake in the Wressle field, where production is set to begin in the second half of 2016.

KEFI Minerals plc (LON:KEFI) added just under 5.9% at 0.54p after it received formal confirmation that the Ethiopian government will plough US$20mln into the company’s Tulu Kapi gold mine in the country.

In contrast, Trinity Exploration & Production PLC (LON:TRIN) slid 8.7% to 2.51p as the Trinidad & Tobago-focused energy company said a further moratorium on debt repayments dad been agreed relating to its outstanding debt balance of US$13mln.

The extension is only until the end of this working week, however.

Sector peer Frontera Resources Corporation (LON:FRR) gave up 7.4% to 0.32p as it issued 180mln shares to two strategic services providers to pay for some US$780,000 of oil field services.


Open

UK equities were slow out of the blocks, with the major indices stumbling despite a contrary reaction to underwhelming economic data from China.

The FTSE 100 index was down 24 points at 6,114 after almost an hour of trading, despite the mining heavyweights notching up some handsome gains and the oil heavyweights benefiting from a surge in the price of Brent crude, after Goldman Sachs declared that over-supply issues are over.

“Analysts pointed to the steps taken to cut production, and unforeseen tragedies like the raging wildfires in Canada, as the main reasons why the oil glut has begun to decrease,” noted Connor Campbell at foreign exchange trading platform Spreadex.

The miners went against type, advancing briskly despite more evidence that growth in the Chinese economy is slowing down; investment, factory output and retail sales figures released on Saturday all undershot expectations.

Despite this, metals prices have hardened as China's central bank signalled its intention to continue with policies that would support growth in the People's Republic.

Mid-cap miner Lonmin PLC (LON:LMI) was the best performer in the sector, climbing 14% to 186.25p after an upbeat trading statement in which it said cost savings are well ahead of schedule.

The company had net cash of US$114mln at the end of March, versus net debt of US$185mln six months earlier.

Stocks on London's junior market also got off to a subdued start, with the FTSE Aim All-Share down 0.6 at 723.9 and the FTSE Aim 100 six points in the hole at 3,379.

Plaza Centers N.V. (LON:PLAZ) was wanted, rising 11% to 3.05p, after it sold its 50% stake in the Riga Plaza shopping and entertainment centre in Riga, Latvia, for around €93.4mln.

Union Jack Oil PLC (LON:UJO) carried the standard for small-cap oil producers, climbing 7.7% to 0.14p after its full-year results.

The company said it expects to make more acquisitions to further bolster its portfolio of onshore UK oil and gas assets. Underpinning its plans is an 8% stake in the Wressle field, where production is set to begin in the second half of 2016.

KEFI Minerals PLC (LON:KEFI) added just under 4% at 0.53p after it said it had received formal confirmation that the Ethiopian government will plough US$20mln into the company’s Tulu Kapi gold mine in the country.

In contrast, Trinity Exploration & Production PLC (LON:TRIN) slid 8.7% to 2.51p as the Trinidad & Tobago-focused energy company said a further moratorium on debt repayments dad been agreed relating to its outstanding debt balance of US$13mln.

The extension is only until the end of this working week, however.

Sector peer Frontera Resources Corporation (LON:FRR) gave up 8.4% at 0.32p as it issued 180mln shares to two strategic services providers to pay for some US$780,000 of oil field services.
 


Preview

The FTSE 100 looks set to kick off the week in negative territory amid growing concerns the US might be preparing for a June hike to interest rates.

This, and the continued uncertainty ahead of the Brexit vote next month, means the index of blue chip shares is likely to open 20 points lower at 6,118.50, according to the spread betting firms.

In Asia overnight, the Nikkei 225 was up 0.3%, boosted by hopes of a sales tax freeze, while China’s main markets staged recovery after initially reacting negatively to another raft of economic data.

Investment, factory output and retail sales figures released on Saturday all undershot expectations.

Yet by mid-afternoon local time the Shanghai Composite was ahead 0.2%, while in Hong Kong the Hang Seng had advanced more than 1%.

Here in the UK, the release on Tuesday of the April inflation numbers will be closely scrutinised, while later in the week we have unemployment, wages and retail sales stats.

On the corporate front, Merlin Entertainment, Vodafone and Thomas Cook are among the companies scheduled to report this week along with Royal Mail and SAB Miller.

Brent Crude Oil up 1.4% at US$48.50 a barrel as Goldman Sachs said two years of oversupply is almost over.

Gold up 0.7% and ahead for a second successive day US$1.277.70 per ounce amid predictions the yellow metal could hit US$1,400 by the year end.

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