Shares regain lost ground as miners soar in London

The FTSE 100 gained 1.3% on Friday

Pa City Staff
Friday 09 July 2021 17:24
UK Government-backed mortgage scheme
UK Government-backed mortgage scheme

Stocks have gone some of the way to recover from Thursday’s nightmare session as they ended the week with a solidly green performance.

Global markets bounced back from their bruising performance, including the FTSE 100, which registered a 1.3% rise.

It left the index at 7,122 points, 91 higher than a day earlier.

Performances in London were in part written by events in China where fears over the country’s economic recovery are thought to have led to a policy change from the central bank.

The People’s Bank of China slashed the amount of cash that the country’s banks must hold in reserve in a move expected to release more than £100 billion worth of liquidity into the market.

China’s growing economy is a big consumer of the metals mined by London’s natural resource giants. So any cash freed up in the country is likely to lead to a windfall for FTSE 100 miners.

Evraz, BHP Rio Tinto Glencore and Anglo American therefore all crowded around the top of the index on Friday.

“Concerns about the global economic recovery have weighed on equity markets this week, due to rising Delta variant cases in Asia, which has prompted Japan to implement a state of emergency, and South Korea tightening restrictions prompting increased volatility and weakness in stocks more broadly,” said CMC Markets analyst Michael Hewson

He added: “Much will depend on how quickly those countries where cases are rising, can speed up their vaccine rollout plans in order to limit the scale of the various lockdown and travel restrictions.”

In the US the S&P 500 was trading up 1% and the Dow Jones had gained 1.3% when markets in Europe were closing.

The Dax in Germany and France’s Cac index gained 1.7% and 2.1% respectively.

Sterling remained fairly unmoved. By the end of the day one pound would buy 1.3836 dollars or 1.1665 euros.

Land Securities said on Friday that it had collected 81% of the rent due for the past three months. Its shares rose by 3.2%, a little ahead of fellow landlord Derwent, which closed up 1.8% after revealing it collected 93% of office rents.

The best performer on the FTSE 250 was Vectura. The business agreed a takeover offer from Philip Morris for 150p per share. It replaced an earlier, lower, offer from private equity giant Carlyle.

But investors are betting that the race to take over Vectura is not over yet. By the end of Friday shares were trading at 154.6p, above the Philip Morris offer, indicating that shareholders think a higher bid is on its way.

Shares in Philip Morris rose 1.3% in New York.

The biggest risers on the FTSE 100 were Evraz, up 31.8p to 615.2p, BHP, up 94p to 2262p, Anglo American, up 122.5p to 2991p, Rio Tinto, up 240p to 6106p, and Burberry, up 76p to 2063p.

The biggest fallers on the FTSE 100 were Just Eat Takeaway.com, down 228p to 6427p, United Utilities, down 7p to 507.2p, B&M, down 3.6p to 545p, Avast, down 3.1p to 495.3p, and Reckitt, down 29p to 6432p.