London close: Stocks higher as miners, oil plays rally

by | Oct 25, 2021

London stocks managed a positive finish on Monday, with miners boosted by firming metals prices, as investors braced for a raft of earnings releases and the Autumn Budget.
The FTSE 100 ended the session up 0.25% at 7,222.82, and the FTSE 250 was ahead 0.04% at 22,941.78.

Sterling was in the green as well, last rising 0.06% on the dollar to $1.3763, and advancing 0.36% against the euro to €1.1855.

“Equities throughout Europe and the US are on the rise today, with oil and gas names heading up the gains thanks to a seven-year high for WTI crude,” said IG senior market analyst Joshua Mahony.

“Rising crude oil prices have helped drive UK petrol prices to a record high today, although that could have significant negative implications for growth going forward.

“From a business perspective, elevated petrol prices raise costs and diminish margins.”

Mahony said that meanwhile, that rise in petrol prices did dampen expectations for consumer activity, as higher travel costs cut into disposable income levels.

“Coming at a time when businesses are already suffering from supply-chain difficulties, the rise in energy prices does little to help sentiment for retailers coming into the festive period.”

Reports emerged in the afternoon that Chancellor Rishi Sunak was preparing to raise the national living wage to £9.50 per hour as part of Wednesday’s budget, giving British workers an extra £1,000 per year.

The national living wage – the national minimum wage for anybody over the age of 22 – will increase from £8.91 per hour, while Britons aged 21-22 will see an increase to £9.18 an hour from £8.36, and apprentices 16 and over and not in full-time education will get a rise to £4.81 from £4.30 an hour.

“This is a government that is on the side of working people,” Sunak said.

“This wage boost ensures we’re making work pay and keeps us on track to meet our target to end low pay by the end of this parliament.”

Price increases were still a concern, however, with the cost of petrol hitting a new record high as global oil prices continued to soar, placing further inflationary pressure on hard-pressed Britons already struggling with surging energy costs and a tax rise.

Breakdown specialists the RAC and AA said the average price of petrol hit record high of 142.94p a litre on Sunday, beating the previous all-time high of 142.48p reached in April 2012.

Unleaded petrol had risen 28p in a year, adding £15 to the cost of filling up the average family car.

“This is truly a dark day for drivers, and one which we hoped we wouldn’t see again after the high prices of April 2012,” said RAC spokesperson Simon Williams

“This will hurt many household budgets and no doubt have knock-on implications for the wider economy.”

On the economic front, footfall at UK retail destinations fell last week in the run-up to the half-term holiday, and as the return to the office began to slow.

According to data released by retail analyst Springboard, footfall across retail destinations declined 1.5%, with high streets seeing the biggest fall, at 3.6%, while footfall at retail parks and shopping centres rose 0.9% and 0.4%, respectively.

Springboard said the fall in footfall at high streets was universal, spanning all UK geographies, but the most modest drop was seen in the Greater London region.

“Footfall declined across UK retail destinations last week, which was not an unexpected result given that many schools have their half term holiday this week and a dip in activity in the week before the school break is a long term trend as shopping trips are deferred,” said Diane Wehrle, insights director at Springboard.

“Our insight shows that in five of the six years between 2014 and 2019 footfall declined from the week before in the week preceding the October school half term break.”

In equity markets, miners were on the right side of the ledger as copper prices rose, with Rio Tinto up 2.01%, BHP adding 2.83% and Glencore 1.34% higher.

HSBC advanced 1.9% after it reported bumper third-quarter profits that smashed expectations and unveiled plans for a share buyback of up to $2bn.

The bank’s reported pre-tax profit for the third quarter jumped 75.8% year on year to $5.4bn, well beyond the $3.776bn forecast by analysts in estimates compiled by the bank.

Revenue rose 0.7% to $12bn, compared with an expected 3.1% rise.

Elsewhere, Weir Group was lifted 2.43% by an upgrade to ‘outperform’ from ‘neutral’ at Exane.

Online trading platform Plus500 ended a turbulent session 2.66% firmer, after it posted a dip in third-quarter earnings but said full-year revenues and underlying earnings were set to be ahead of analysts’ expectations.

On the downside, cybersecurity firm Darktrace tumbled 20.68% after an initiation at ‘sell’ by Peel Hunt, which said there is “a disconnect between the valuation and the ultimate revenue opportunity”.

Broadcaster ITV lost 1.11% following a report over the weekend that it was considering buying state-owned broadcaster Channel 4.

According to the Times, former Channel 4 boss Lord Grade and ITV are among potential bidders circling the network.

Market Movers

FTSE 100 (UKX) 7,222.82 0.25%
FTSE 250 (MCX) 22,941.78 0.04%
techMARK (TASX) 4,561.48 -0.53%

FTSE 100 – Risers

Antofagasta (ANTO) 1,479.50p 3.03%
BHP Group (BHP) 1,996.00p 2.83%
Anglo American (AAL) 2,821.50p 2.01%
Rio Tinto (RIO) 4,766.50p 2.01%
HSBC Holdings (HSBA) 441.70p 1.90%
Pershing Square Holdings Ltd NPV (PSH) 2,970.00p 1.89%
Evraz (EVR) 644.60p 1.83%
BP (BP.) 360.65p 1.59%
Royal Dutch Shell ‘A’ (RDSA) 1,775.80p 1.52%
Scottish Mortgage Inv Trust (SMT) 1,460.00p 1.49%

FTSE 100 – Fallers

BAE Systems (BA.) 574.00p -2.65%
Smiths Group (SMIN) 1,390.00p -2.28%
London Stock Exchange Group (LSEG) 7,484.00p -2.00%
Flutter Entertainment (CDI) (FLTR) 14,130.00p -1.94%
Rolls-Royce Holdings (RR.) 132.54p -1.89%
Intertek Group (ITRK) 4,906.00p -1.74%
Imperial Brands (IMB) 1,569.50p -1.17%
ITV (ITV) 102.90p -1.11%
BT Group (BT.A) 135.20p -1.10%
WPP (WPP) 943.40p -1.05%

FTSE 250 – Risers

Harbour Energy (HBR) 381.00p 5.19%
Ferrexpo (FXPO) 324.80p 4.57%
Energean (ENOG) 915.00p 3.69%
Bridgepoint Group (Reg S) (BPT) 483.50p 3.53%
Essentra (ESNT) 272.50p 3.40%
Watches of Switzerland Group (WOSG) 1,128.00p 3.30%
FirstGroup (FGP) 93.40p 2.98%
Cairn Energy (CNE) 193.40p 2.93%
BlackRock World Mining Trust (BRWM) 573.00p 2.87%
Plus500 Ltd (DI) (PLUS) 1,430.00p 2.66%

FTSE 250 – Fallers

Darktrace (DARK) 750.00p -20.68%
Chrysalis Investments Limited NPV (CHRY) 239.00p -4.02%
Caledonia Investments (CLDN) 3,525.00p -3.42%
Cineworld Group (CINE) 60.28p -3.24%
Oxford Biomedica (OXB) 1,518.00p -2.95%
Auction Technology Group (ATG) 1,312.00p -2.53%
XP Power Ltd. (DI) (XPP) 5,130.00p -2.49%
Bytes Technology Group (BYIT) 499.80p -2.38%
TP Icap Group (TCAP) 159.02p -2.11%
CLS Holdings (CLI) 222.50p -2.00%

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