Stock prices in London largely started Thursday in the green, particularly in the mining sector.
Miners were performing well thanks to a strong update from Anglo American, and amid expectations of economic stimulus in China.
The FTSE 100 index opened up 37.35 points, 0.5%, at 7,625.55. The FTSE 250 was up 14.90 points, 0.1%, at 19,337.32, and the AIM All-Share was down 0.84 of a point, 0.1%, at 765.28.
The Cboe UK 100 was up 0.4% at 760.73, the Cboe UK 250 was up 0.3% at 16,986.91, and the Cboe Small Companies was down 0.1% at 13,609.09.
In European equities on Thursday, the CAC 40 in Paris was marginally lower, while the DAX 40 in Frankfurt was down 0.3%.
London’s stocks had rallied on Wednesday after a shock UK inflation print, which showed consumer prices rose 7.9% annually in June, cooling from 8.7% the month before, and below estimates of 8.2%.
The pound had dropped sharply against the dollar, but regained some ground overnight. Sterling was quoted at $1.2919 early Thursday, higher than $1.2890 at the London equities close on Wednesday.
The euro traded at $1.1218, higher than $1.1197. Against the yen, the dollar was quoted at JP¥139.47, down versus JP¥139.65.
Meanwhile, the People’s Bank of China said it held its one-year loan prime rate - which serves as a benchmark for corporate loans - at 3.55%. The five-year rate remained at 4.20%.
The move was anticipated by the market, according to FXStreet-cited consensus, with the PBoC also maintaining medium and short-term lending rates earlier this week. However, the market is increasingly expecting the PBoC to cut the LPR in the comings months, given the economic slowdown in the country.
In China, the Shanghai Composite was down 0.9%, while the Hang Seng index in Hong Kong was down 0.2%.
The hopes for economic stimulus in China gave a boost to FTSE 100 commodity stocks, as the demand outlook improved.
Among London’s large-caps, Anglo American was the top performer, rising 4.8%.
The miner said production rose 11% year-on-year in the second quarter, which reflects the ramp-up of its new Quellaveco copper mine in Peru. The mine has now reached commercial production levels. It also noted a strong showing from its Minas-Rio iron ore operation in Brazil, and higher production from its Australian open-cut operations in steelmaking coal.
Copper production rose 56% year-on-year to 209,000 tonnes, iron ore rose 8.3% to 15.6 million tonnes, and steelmaking coal rose 28% to 3.4 million tonnes. Meanwhile, nickel fell 3.9% to 9,900 tonnes, while platinum group metals fell 8.6%, diamonds fell 3.8% and manganese ore fell 1.0%.
‘Our focus remains resolutely on safely achieving our full year production guidance through the seasonally stronger second half of the year,’ said Chief Executive Duncan Wanblad.
Fellow miner Glencore was up 2.0%, ahead of Friday’s trading statement. Antofagasta rose 1.5%, having lowered its annual production guidance on Wednesday.
Brent oil was trading at $79.50 a barrel, down from $80.39 late Wednesday.
Gold was quoted at $1,982.43 an ounce early Thursday, higher than $1,975.43 on Wednesday.
In the FTSE 250, Babcock International was up 5.9%.
The defence engineering services firm reported a year of modest profit growth, though profit took a hit due to a loss-making contract. In the year ended March 31, Babcock said revenue rose 8.2% to £4.44 billion from £4.10 billion year-on-year, though pretax profit shrunk to £6.2 million from £182.3 million.
This was due to a loss on disposal and related items, as well as the £100.1 million type 31 loss related to a contract with the UK Ministry of Defence that Babcock had communicated in April.
Investors seemed pleased with its forward guidance, however. ‘The outlook statement confirms an expectation of delivering continuing cash-backed profitable growth and reintroducing a dividend in [financial 2024 forecast]. Welcome news then,’ Shore Capital remarked.
Among small-caps, Lookers dropped 13%, as its potential acquisition lost the support of a major shareholder.
Lookers said one its shareholders has withdrawn a letter of intent given to Global Auto Holdings, which made a takeover offer for the car dealer group. Last month, Global Auto Holdings, an operator of auto retail dealerships across North America, said it will pay 120 pence per Lookers share.
Cinch Holdco UK Ltd has withdrawn its letter of intent to accept the offer for its 19.2% stake in Lookers and now intends to vote against the acquisition, Lookers said.
The takeover resolutions are now not capable of being passed, and Lookers will remain as an independent company, it confirmed.
In the US on Wednesday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.3%, the S&P 500 up 0.2% and the Nasdaq Composite marginally higher.
Netflix shares dropped 8.3% in after-hours trade.
After the closing bell, the streaming company reported its second quarter results, boasting higher-than-expected subscriber growth, after its password-sharing crackdown. However, revenue missed market estimates, sending its shares lower.
‘Netflix had its second-best quarter since the heart of the pandemic, yet, its sales and revenue fell short of expectations due to price cuts in some markets and the unfavourable exchange rate, while [third quarter] forecast disappointed,’ explained Swissquote Bank’s Ipek Ozkardeskaya.
The Nikkei 225 index in Tokyo closed down 1.2%.
Japan posted a JP¥43 billion, $309 million, trade surplus in June, the first surplus in nearly two years, thanks to rising exports of automobiles and construction machines and falls in imports of crude oil, coal and liquefied natural gas, according to data released by the finance ministry. The market had expected a JP¥46.7 billion deficit.
The S&P/ASX 200 in Sydney closed marginally higher.
Still to come on Thursday’s economic calendar, there’s US weekly unemployment claims report at 1330 BST.
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