LONDON MARKETS: FTSE 100 Ends Higher, Boosted By Miners And Plunging Pound
25 Oktober 2016 - 6:27PM
Dow Jones News
By Victor Reklaitis, MarketWatch
Airlines in focus as Heathrow expansion gets OK
U.K. stocks stepped higher on Tuesday, with miners and wealth
manager St. James's Place PLC helping to lead the way.
Aided by a weaker pound, the FTSE 100 tacked on 0.5% to end at
7,017.64, bouncing back from the prior day's decline of 0.5%
(http://www.marketwatch.com/story/ftse-100-holds-to-thin-gain-but-easyjet-glides-higher-2016-10-24).
Mining stocks were among the notable advancers, moving up as
prices for gold and most other metals rose. Gold futures were up
0.8% to $1,273.60 an ounce.
Also helping the sector, Anglo American PLC (AAL.LN) posted
higher third-quarter output
(http://www.marketwatch.com/story/anglo-american-output-higher-except-for-copper-2016-10-25)
across all divisions except copper. Anglo tacked on 4.6%,
Antofagasta PLC (ANTO.LN) rose 3%, Rio Tinto PLC (RIO) (RIO) (RIO)
gained 4.5%. Glencore PLC (GLEN.LN) added 3.6%.
"It's been the mining sector that has been on the bridle with
Anglo's encouraging statement providing the impetus," said David
Buik, market commentator at Panmure Gordon & Co., in a
note.
St. James's Place (STJ.LN) was also among the benchmark's
winners, climbing 1.6% after reporting a 31% jump
(http://www.marketwatch.com/story/st-jamess-place-funds-under-management-up-31-2016-10-25)
in funds under management.
Airline stocks were in focus on Tuesday as the U.K. government
decision approved expansion plans at Heathrow Airport
(http://www.marketwatch.com/story/londons-heathrow-airport-gets-the-greenlight-for-new-runway-2016-10-25),
favoring a new runway there over building one at Gatwick Airport.
British Airways parent International Consolidated Airlines Group
S.A. (IAG.LN) and easyJet PLC (EZJ.LN) both closed down 0.7%.
See:Here's why J.P. Morgan is giving up on its big call on U.K.
stocks
(http://www.marketwatch.com/story/jp-morgan-gives-up-on-key-2016-call-and-turns-toward-europe-instead-2016-10-24)
Posting the FTSE's worst performance on Tuesday, Whitbread PLC
(WTB.LN) -- operator of the Costa Coffee and Premier Inn chains --
fell 3.5%. Whitbread's overall first-half profit
(http://www.marketwatch.com/story/whitbread-profit-beats-forecasts-2016-10-25-24855056)
was better than expected, but Costa's performance wasn't
encouraging.
The pound and BOE's Carney: The Brexit-hit pound was changing
hands at $1.2164, down sharply from $1.2218 late Monday in New
York.
Sterling dropped ahead of comments from the Bank of England's
chief, Mark Carney. It fell under $1.21 before recovering somewhat.
Carney said the central bank isn't targeting an exchange rate, but
it's not indifferent to it.
"The British pound experienced its most volatile day since the
flash crash just over two week ago," said Jasper Lawler, an analyst
at CMC Markets, in a note. "Just like the flash crash, today's
mini-episode of sharp selling had traders scratching their head for
catalysts."
"Comments from Chancellor [Phillip] Hammond appear to have been
the trigger, though a lack of decent liquidity, particularly on the
buy-side is the ultimate cause," Lawler added. "Hammond said he
'cannot imagine rejecting the Bank of England's bond-buying
program,' opening the door more QE and further devaluation of the
pound."
A weaker pound boosted the FTSE 100 on Tuesday, as it benefits
the multinational companies that generate the bulk of their revenue
overseas -- about 75% of revenue for the FTSE comes from outside
the U.K.
(END) Dow Jones Newswires
October 25, 2016 12:12 ET (16:12 GMT)
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