FTSE 100 movers: Commodities climbs, but leave Glencore behind
London's blue chip benchmark was in the pink on Tuesday as commodities and tobacco companies combined to boost the index.
Top of the FTSE 100 leaderboard were mining giants Antofagasta and BHP Billiton thanks to a boost from the weaker dollar and metals prices bouncing off their lows. Copper edged higher up off the seven-month low from the previous session as trade tensions between the US and China stir concerns about demand.
Oil giants Shell and BP were a major positive influence on the index as both climbed on the back of higher crude oil prices. Brent crude was up 1.4% to $78.36 after Libya's National Oil Corporation declared force majeure on some of its supplies when trying to export 850,000 bpd from certain ports on Monday - with the move wiping out OPEC’s planned production increases.
Credit Suisse fuelled gains for British Airways owner IAG as analysts upped their price target to 895p from 721p, while a positive note from Deutsche Bank helped lift GSK a EPS forecasts were raised by 6-7%.
Tobacco companies BAT and Imperial Brands were both higher despite the Office for National Statistics unveiling a 17% fall in the number of smokers since 2014. Since 2014 there has been a 49% increase in the number of users of e-cigarettes in the UK - with 2.8m people now classified as ‘current’ vapers. Some analysts cited demand for 'safe haven' stocks as a likely boost for the pair and other defensive shares.
Glencore was the big loser on the day as the Swiss-headquartered commodities giant received a subpoena from the US Department of Justice related to possible money laundering. The subpoena demanded documents and other records relating to the group's business in Nigeria, the Democratic Republic of Congo and Venezuela from 2007 to present.
Analysts at RBC Capital Markets said the subpoena "drives more uncertainty into the Glencore investment case, which we find compelling from a valuation perspective, but increasingly challenged from a headline risk perspective". With not much detail in the company's RNS announcement to understand exactly what the investigation holds, the analysts said that with the subpoena covering multiple countries, "this would indicate that there is a relatively thorough investigation at hand".
Micro Focus was among the fallers a day after it agreed to sell its SUSE software business to a Swedish private equity group for $2.5bn in cash.
Burberry fell after analysts at Redburn said they are "cynical" about management's plans to achieve a greater fashion mix and a higher luxury positioning, questioning the "potency and strength of the brand", point out their "mixed" track record in leather goods and its "low sales productivity".
Market Movers
FTSE 100 (UKX) 7,610.81 0.83%
FTSE 250 (MCX) 20,697.26 0.44%
techMARK (TASX) 3,515.43 0.59%
FTSE 100 - Risers
Antofagasta (ANTO) 987.20p 3.16%
BT Group (BT.A) 223.15p 2.91%
BHP Billiton (BLT) 1,696.00p 2.59%
British American Tobacco (BATS) 3,918.70p 2.58%
Evraz (EVR) 503.40p 2.36%
St James's Place (STJ) 1,157.50p 2.21%
GlaxoSmithKline (GSK) 1,550.20p 2.18%
International Consolidated Airlines Group SA (CDI) (IAG) 667.40p 2.17%
Severn Trent (SVT) 2,017.00p 2.07%
Randgold Resources Ltd. (RRS) 5,844.00p 1.95%
FTSE 100 - Fallers
Glencore (GLEN) 327.55p -6.23%
Micro Focus International (MCRO) 1,278.00p -4.88%
RSA Insurance Group (RSA) 660.00p -2.65%
Burberry Group (BRBY) 2,109.50p -1.79%
Smith & Nephew (SN.) 1,330.00p -0.86%
Royal Bank of Scotland Group (RBS) 250.75p -0.69%
Halma (HLMA) 1,344.00p -0.22%
Sky (SKY) 1,461.00p -0.20%
Direct Line Insurance Group (DLG) 341.70p -0.09%
Berkeley Group Holdings (The) (BKG) 3,706.00p -0.08%