London midday: Rally in mining stocks boost equities

9th Oct 2015 11:13

(ShareCast News) - The FTSE advanced on Friday at midday, driven by a rally in mining stocks as metal prices rose.Glencore led mining shares higher as investors welcomed its decision to cut 500,000 tonnes or around a third of its annual zinc production as it looks to combat declining prices."This is a major move by the company showing leadership in cutting output to help support commodity prices and is more meaningful to the market than the coal supply cuts it previously made," Investec said.Gold, silver and copper prices increased following the report, pushing Anglo American, Fresnillo, Antofagasta, BHP Billiton and Rio Tinto into positive territory.The lift from miners offset a worse-than-expected report on the UK trade deficit. According to the Office for National Statistics, the deficit hit £11.1bn in August compared with forecasts for a £9.9bn figure and an upwardly revised £12.2bn in July. The UK's deficit on trade in goods and services declined from £4.5bn in July to £3.3bn in August.Exports of goods rose by £0.8bn to £23.6bn, driven higher by a £0.6bn increase in car exports to a record. Imports declined £0.3bn to £34.7bn over the same period.The UK's construction output fell 4.3% against the 1% increase expected, its biggest month to month fall since December 2012."This suggests that the impact of the slowdown in China and other emerging markets is beginning to bite, with exports to China down 16% over the three months to August compared with the previous three months," said Martin Beck, senior economic advisor to the EY ITEM Club."These figures suggest that net trade is likely to exert a sizeable drag on GDP growth in the third quarter. There is now some downside risk to our forecast that the preliminary estimate - due at the end of the month - will show GDP growth of 0.6%."Meanwhile, the market continued to digest Thursday's meeting minutes from the Bank of England, the European Central Bank and the Federal Reserve.The BoE on Thursday voted 8-1 to maintain rates at 0.50% and its asset purchase programme at £375bn, as expected by analysts, citing weak inflation, low wages, and potential risks from a slowdown in emerging markets.The meeting minutes revealed policymaker Ian McCafferty again voted for an interest rate increase of 25 basis points.Analysts were mixed in their predictions for an interest rate rise with some saying February 2016 while others suggesting the BoE might hold off until late 2016 or early 2017.The European Central Bank's account of its 2-3 September meeting revealed the Governing Council reiterated that it would consider extending the asset purchase programme past September 2016 if needed.The minutes from the Fed's 16-17 September meeting showed that the central bank was close to raising interest rates but the risks of China's economic slowdown hurting US growth stopped them. Policymakers said that a rate hike "might be near" but they would need to monitor developments.Barclays sees the next rate hike in March next year following weak jobs data.Fed officials Dennis Lockhart and Charles Evans are due to speak later Friday and any clues on the timing of an interest rate increase will be closely monitored.US wholesale inventory and sales data is also set for release at 1500 BST. Wholesale trade sales are forecast to drop 0.4% in August compared to a month ago, while inventories are expected to be flat.Company-wise, Vedanta Resources jumped after posting a rise in first half production across most of its commodities, as it said net debt at the end of the quarter is expected to be below $8bn and expressed confidence that it will meet its covenants as at the end of September.Fresnillo was also buoyed by a broker note from HSBC which upgraded its target price to 810p from 760p and reiterated its 'buy' rating.Lloyds Banking Group climbed as the UK government cut its stake by a further 1% to just under 11% after it emerged that the finance ministry will sell at least £2bn worth of shares to private retail investors in spring next year.Sports Direct plunged as it said it plans to make a multi-million investment in the Heatons store portfolio, after it announced on Wednesday that it has entered into a sale and purchase agreement to buy the remaining stake it doesn't already own in the company. Market MoverstechMARK 3,046.55 +0.54%FTSE 100 6,429.63 +0.86%FTSE 250 17,111.26 +0.63% FTSE 100 - RisersGlencore (GLEN) 129.90p +7.67%Anglo American (AAL) 715.30p +5.58%Fresnillo (FRES) 736.50p +4.54%Antofagasta (ANTO) 599.50p +3.72%Admiral Group (ADM) 1,582.00p +3.40%Rio Tinto (RIO) 2,598.00p +3.10%Standard Chartered (STAN) 771.70p +3.07%BHP Billiton (BLT) 1,178.00p +2.88%Mondi (MNDI) 1,495.00p +2.68%Randgold Resources Ltd. (RRS) 4,445.00p +2.54% FTSE 100 - FallersSports Direct International (SPD) 712.00p -3.65%TUI AG Reg Shs (DI) (TUI) 1,223.00p -1.45%Carnival (CCL) 3,288.00p -1.41%Whitbread (WTB) 4,739.00p -0.61%Hikma Pharmaceuticals (HIK) 2,128.00p -0.56%National Grid (NG.) 930.20p -0.48%International Consolidated Airlines Group SA (CDI) (IAG) 557.00p -0.36%London Stock Exchange Group (LSE) 2,443.00p -0.33%Kingfisher (KGF) 352.60p -0.31%Smith & Nephew (SN.) 1,125.00p -0.27% FTSE 250 - RisersVedanta Resources (VED) 588.00p +10.94%Petrofac Ltd. (PFC) 946.00p +10.26%Premier Oil (PMO) 96.00p +8.41%Tullow Oil (TLW) 264.40p +7.57%Drax Group (DRX) 285.70p +5.50%Kaz Minerals (KAZ) 139.10p +3.96%Ashmore Group (ASHM) 292.90p +3.87%Evraz (EVR) 96.90p +3.80%Cairn Energy (CNE) 164.40p +3.79%Amec Foster Wheeler (AMFW) 835.00p +3.53% FTSE 250 - FallersNMC Health (NMC) 806.00p -3.01%Entertainment One Limited (ETO) 221.50p -1.99%JD Sports Fashion (JD.) 945.00p -1.87%Just Retirement Group (JRG) 164.40p -1.85%Savills (SVS) 900.00p -1.85%AO World (AO.) 160.00p -1.66%Moneysupermarket.com Group (MONY) 312.70p -1.57%Jimmy Choo (CHOO) 136.50p -1.44%AL Noor Hospitals Group (ANH) 966.50p -1.38%Greggs (GRG) 1,104.00p -1.34% FTSE TechMARK - RisersFiltronic (FTC) 7.12p +3.64%SDL (SDL) 381.25p +3.04%Spirent Communications (SPT) 78.00p +2.97%Oxford Instruments (OXIG) 645.50p +2.06%E2V Technologies (E2V) 238.25p +0.85%NCC Group (NCC) 252.25p +0.70%Consort Medical (CSRT) 935.00p +0.32%Skyepharma (SKP) 339.50p +0.15%Sepura (SEPU) 172.75p +0.14%Oxford Biomedica (OXB) 7.55p +0.13% FTSE TechMARK - FallersXP Power Ltd. (DI) (XPP) 1,560.00p -5.45%Sarossa (SARS) 1.82p -4.71%Dialight (DIA) 667.00p -1.04%KCOM Group (KCOM) 90.50p -0.82%BATM Advanced Communications Ltd. (BVC) 19.50p -0.64%IShares Euro Gov Bond 7-10YR UCITS ETF (IEGM) € 203.18 -0.01%