FTSE extends winning run as stronger metals boost mining stocks

A worker shelters from the rain under a Union Flag umbrella as he passes the London Stock Exchange in London, Britain, October 1, 2008.  REUTERS/Toby Melville/File Photo

UK shares rose on Monday, underpinned by a rally in mining stocks on the back of firmer metals prices, building on the previous session’s three-week high and on course to post its fifth straight day of gains.

The blue-chip FTSE 100 index .FTSE was up 0.1 percent at 7,262.78 points by 0955 GMT.

Mining stocks .FTNMX1770 gained 1.6 percent after the price of copper touched a 20-month high on the back of supply worries after shipments were shut off from the world’s two biggest copper mines. [MET/L]

Shares in Glencore (GLEN.L), Anglo American (AAL.L), BHP Billiton (BLT.L) and Antofagasta (ANTO.L) climbed between 1.7 percent and 2.2 percent. BHP Billiton was also in focus after an attack on its Escondida mine in Chile at the weekend.

A number of price-target upgrades also helped the sector. Glencore was raised to “equal weight” from “underweight” at Morgan Stanley, while RBC Capital Markets raised Rio Tinto’s (RIO.L) target price.

“Post 2016 Glencore’s valuation multiples, financial risk, downside to PT and risk reward skew are similar to its London peers,” Morgan Stanley analysts said in a note.

“Reinvestment or return of excess cash is the key value driver ahead.”

An upgrade from Peel Hunt to “add” from “hold” also helped Hargreaves Lansdown (HRGV.L) rise 1.2 percent, with analysts citing a stronger-than-expected first-half performance in its results last week.

“As much as the financial returns, in our view the statement last week confirmed the power of Hargreaves’ business model,” Peel Hunt analysts said in a note, singling out the development of the company’s HL Savings unit.

Mid-caps also rose, with the FTSE 250 index .FTMC hitting a new record high, up 0.1 percent.

Shares in energy firm Evraz (EVRE.L) were the biggest gainers, up 6 percent, while earnings underpinned a rally in trading software provider Fidessa Group’s (FDSA.L) shares.

They rose 4.3 percent after Fidessa said that its international revenue spread provided stability amid uncertainty following the Brexit vote and the U.S. election.

“Fidessa has delivered a solid set of results in a year where its customers had to grapple with heightened geopolitical uncertainty,” Jefferies’ equity analyst, Damindu Jayaweera, said in a note, who expects the business climate to improve in 2017.

[Source:- reuters]