Miners lead FTSE rise as Anglo American starts share buyback

The index closed up 0.7% to end the day at 7,082.

Anglo American kicked off a one billion dollar share buyback on Monday (John Walton/PA)
Anglo American kicked off a one billion dollar share buyback on Monday (John Walton/PA)

London’s resource giants helped lead the FTSE 100 higher on Monday as Anglo American kicked off a plan to buy back one billion dollars of its own shares.

The company bought more than £5 million of its own shares from the market, driving up the price by 3.4%.

It put the miner close to the top of the FTSE 100 list of companies, and other miners were not far behind.

At the end of the day they helped create the difference that pushed the index far into the green.

With the UK experiences key in determining whether this vaccine provides enough protection to avoid another lockdown, yesterday’s decline in cases and deaths does raise hope that we will soon see the world return to some sort of normality

Joshua Mahony, IG

It rose 49.42 points to 7,081.72.

The 0.7%  rise put London’s top stocks ahead of those in Germany where the Dax rose 0.3%, but behind Paris’s Cac, up 1%.

The FTSE also outperformed the main indexes in New York. The S&P 500 had risen 0.3% when markets closed in Europe. The Dow Jones had gained 0.2%.

“Recent fears around how Covid deaths could continue to rise in the wake of the July reopening have been allayed after the Sunday death count fell to 65 (from 71),” said Joshua Mahony, an analyst at IG.

“With the UK experiences key in determining whether this vaccine provides enough protection to avoid another lockdown, yesterday’s decline in cases and deaths does raise hope that we will soon see the world return to some sort of normality.

“The UK has opened its borders to vaccinated visitors from the EU and US, with the removal of quarantine rules raising the hopes that travel will receive a big boost in the months ahead.”

Sterling dipped around 0.1% and would buy 1.3888 dollars or 1.1694 euros by the end of the day.

The price of Brent crude oil dropped 3.3% to 72.89 dollars per barrel.

In company news, the US’s Parker-Hannifin won approval from the board of Meggitt as it crossed the Atlantic with a £6.3 billion offer for the FTSE 250 defence company.

Meggitt’s shares soared in London, but ended the day up 57% at just 735p, well below the 800p per share offer from Parker-Hannifin.

It implies that shareholders are still uncertain whether the deal will go ahead.

The UK Government is already taking an interest in the deal according to reports, and could intervene on grounds of national security.

In other takeover news, fellow FTSE 250 firm Sanne said it is in “advanced discussions” with Apex, which might take the firm private for £1.5 billion.

Shares rose 7.6%, although again remained short of the offer price.

Elsewhere, HSBC said that it would pay out an interim 5p per share dividend to shareholders as it revealed a more than doubling of pre-tax profit in its most recent six-month period.

Shares fell by 0.3%.

The biggest risers on the FTSE 100 were Melrose Industries, up 8.3p to 168.4p, Rolls-Royce, up 3.77p to 103.48p, Anglo American, up 109.5p to 3,300p, IAG, up 5.36p to 173.46p, and Burberry, up 61p to 2,125p.

The biggest fallers on the FTSE 100 were Pearson, down 42.4p to 827p, United Utilities, down 23p to 1,439p, Admiral Group, down 17p to 3,383p, Unilever, down 18p to 4,133p, and Johnson Matthey, down 10p to 2,962p.

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