London open: Mining stocks boosted by Alcoa, Chinese inflation

9th Apr 2013 09:08

The FTSE 100 opened strongly on Tuesday, taking its cue from a decent finish on Wall Street after bellwether Alcoa reported better-than-expected profits in the first quarter, kicking off earnings season with a bang. Profits from the aluminium producer rose 59% year-on-year despite a slight drop in metals prices and a fall in revenue. Speaking to CNBC after the results, Chief Executive Klaus Kleinfield said: "I'm relatively optimistic that 2013 is going to be better than 2012."Banking giants JPMorgan Chase & Co and Wells Fargo & Co will also releasing their earnings reports this week.Meanwhile, news that Chinese inflation slowed more than forecast in March has increased hopes that the People's Bank of China will hold off from tightening policy for the time being. Consumer-price inflation slowed to a 2.1% annual rate in March, down from 3.2% in February when prices soared on the back of the New Year holiday. Analysts had pencilled in a figure closer to 2.5%.Central Bank Governor Zho Xiochuan has been wary of inflation figures after February's data pushed past forecasts, so March's data takes pressure off the Chinese monetary authority to tighten policy as the world's second-largest economy seeks to combat an economic slowdown. Miners gain after Alcoa, Chinese inflationStrong results from mining heavyweight Alcoa and slowing price rises in China were lift resource stocks early on. ENRC, Vedanta, Rio Tinto, EVRAZ and Anglo American were making strong gains this morning.Chemicals group AZ Electronic Materials plummeted early on after a disappointing first-quarter trading update, in which it revealed that full-year revenues are expected to be flat on last year but the group EBITDA margin would remain below normal levels. Group revenues were down 2.0% in the first three months of the year.Drinks giant Diageo fell despite both Jefferies and Nomura raising their target prices for the stock. Nomura admitted in a sector review that valuations of beverages stocks are high with the category trading at a 50% premium to the market on 2013 earnings, though the free cash flow yields are strong.Energy services firm Wood Group rose after saying that its PSN business has signed a "significant" two-year North Sea contract extension with Total E&P UK, with is expected to be valued at around $150m.Oil group Tullow also rose after saying that it has agreed to sell its Bangladesh arm to KrisEnergy Asia Holdings BV, a subsidiary of KrisEnergy Asia, for $42.35m.FTSE 100 - RisersEurasian Natural Resources Corp. (ENRC) 256.90p +3.88%Vedanta Resources (VED) 1,101.00p +3.87%Barclays (BARC) 286.90p +3.50%Rio Tinto (RIO) 3,093.00p +3.39%Royal Bank of Scotland Group (RBS) 274.50p +3.16%Evraz (EVR) 203.30p +3.04%Anglo American (AAL) 1,692.00p +2.89%Glencore International (GLEN) 352.05p +2.74%Xstrata (XTA) 1,061.00p +2.66%Antofagasta (ANTO) 1,012.00p +2.17%FTSE 100 - FallersDiageo (DGE) 1,990.50p -1.31%Kingfisher (KGF) 287.20p -0.97%Smith & Nephew (SN.) 745.00p -0.93%Whitbread (WTB) 2,430.00p -0.37%Rolls-Royce Holdings (RR.) 1,086.00p -0.37%British Sky Broadcasting Group (BSY) 871.50p -0.29%RSA Insurance Group (RSA) 108.40p -0.28%BAE Systems (BA.) 387.30p -0.28%IMI (IMI) 1,234.00p -0.24%Pearson (PSON) 1,139.00p -0.18%FTSE 250 - RisersFerrexpo (FXPO) 166.80p +7.54%Kenmare Resources (KMR) 29.79p +5.64%Hochschild Mining (HOC) 281.50p +5.19%Kazakhmys (KAZ) 391.70p +5.13%Lonmin (LMI) 285.70p +4.35%Petropavlovsk (POG) 203.40p +4.09%African Barrick Gold (ABG) 203.40p +3.14%Thomas Cook Group (TCG) 110.90p +2.97%Smith (DS) (SMDS) 217.20p +2.94%Centamin (DI) (CEY) 47.10p +2.84%FTSE 250 - FallersAZ Electronic Materials SA (DI) (AZEM) 267.00p -27.64%Victrex (VCT) 1,534.00p -3.82%ICAP (IAP) 281.60p -3.79%Daejan Holdings (DJAN) 3,550.00p -2.87%Alent (ALNT) 353.00p -2.49%Ted Baker (TED) 1,258.20p -1.55%Betfair Group (BET) 690.50p -1.36%Diploma (DPLM) 539.00p -1.28%Hansteen Holdings (HSTN) 87.54p -1.08%NMC Health (NMC) 321.90p -0.95%BC