The FTSE 100 rose on Thursday as miners helped lift the index amid a fresh commodities rally and an encouraging production report from Antofagasta.
London’s leading index was 0.5% higher at the time of writing, trading just above 10,200.
In addition to a buoyant commodities sector, sentiment received a boost from US equities, where the S&P 500 topped 7,000 for the first time after the Fed held rates, highlighting a robust jobs market
“The FTSE 100 got off to a strong start as gold moved through $5,500 and oil ticked up amid mounting tensions between the US and Iran,” said AJ Bell investment director Russ Mould.
“The mining sector did much of the heavy lifting for the index, buoyed by a positive production update from Glencore and the impact of precious metals strength on Fresnillo and Endeavour. BP and Shell were lifted by a stronger crude oil price.
“Wall Street yesterday greeted the latest Federal Reserve decision with a shrug as interest rates were kept on hold – with much of the action coming after the market close as investors reacted to results from Tesla, Microsoft and Meta. Asian markets were more downbeat as the possibility of conflict in the Middle East was weighed up.”
US futures were pointing to a higher open, suggesting the rally could build as the European session progresses.
In London, Antofagasta was the latest miner to issue its production report amid surging metals prices, sparking a 7% rally in shares on Thursday.
“Yet another FTSE 100 miner has been able to bask in the glow of surging metal prices, which have propelled the share price to astonishing new highs in under a year,” said Chris Beauchamp, Chief Market Analyst at IG.
“Even a miss on copper output has not dented the rally – everyone can see the madness in metals prices, but there seems no sign of it slowing down. Investors can be forgiven for hoping that the vast profits set to be reaped by miners will translate into better dividend payments in the near future.”
Whether Antofagasta’s rally on Thursday was due to the production report or the sharp overnight price increase driven by Chinese investors remains to be seen, but one thing is for sure: the copper miner is well placed to create shareholder value in the year ahead.
This sentiment was felt across the mining sector, with Glencore, Rio Tinto, and Anglo American all rising by more than 3%.
BP and Shell rose as oil prices rose amid tensions in the Middle East and a drawdown in US inventories yesterday.
3I Group was the FTSE 100’s top riser after the trust’s top holding, Action, performed well during January, and growth continued to motor with strong like-for-like sales and store openings. 3I shares were 10% higher at the time of writing.
Lloyds shares were flat after beating earnings estimates and announcing a fresh £1.75bn share buyback. The muted market response reflects a strong run into results rather than any disappointment around the results.