London close: Miners send FTSE to a negative finish

Thu 21 Apr 2022

LONDON (SHARECAST) - (Sharecast News) - London stocks were mixed at the close on Thursday, with miners leading the top-flight index below the line in late trading, as investors eyed key speeches from central bank officials.
The FTSE 100 ended the session down 0.02% at 7,627.95, while the FTSE 250 finished up 0.36% at 21,159.68.

Sterling was in the red against its major trading pairs, to last sit 0.16% lower on the dollar at $1.3047, and weaken 0.1% against the euro to €1.2027.

"It's been another positive session for European equity markets, with the FTSE 100 once again lagging the wider market due to weakness in basic resources," said CMC Markets chief market analyst Michael Hewson.

"Anglo American and Antofagasta have followed Rio Tinto yesterday with disappointing first quarter production reports - a drought in Northern Chile affected production at Antofagasta's copper mine there, while gold production fell 35%."

Hewson noted the stock was also trading ex-dividend, adding to the downward pressure.

"Anglo American raised its cost guidance, as well as cutting its production guidance for iron ore, platinum, and coal."

Markets were set to digest comments from the top central bank trio in Washington over the next two days, with Federal Reserve chair Jerome Powell, European Central Bank president Christine Lagarde and Bank of England governor Andrew Bailey all due to speak.

Staying stateside, first time jobless claims in the US held near their cycle lows during the past week.

According to the Department of Labor, in seasonally adjusted terms, filings for initial unemployment claims drifted lower by 2,000 over the week ending on 16 April to reach 184,000 - broadly in line with the consensus forecast for a reading of 185,000.

The four-week moving average meanwhile, which aims to smooth out the fluctuations in the figures from one week to another, rose by 4,500 to 177,250.

Secondary unemployment claims, which are those not being filed for the first time and referencing the week ending on 9 April, dropped by 58,000 to approximately 1.42m - a near half-century low.

"We expect initial claims to remain below 200,000 in the weeks ahead, as employers, who continue to struggle to attract and retain workers, will keep layoffs to a minimum," said Nancy Vanden Houten and Kathy Bostjancic at Oxford Economics.

"Even as the economy slows in response to high inflation and rising interest rates, we expect employers will be more likely to slow the pace of hiring than to let go of workers."

Still on data, factory activity in the US mid-Atlantic region slowed in April amid faster price gains, according to a closely-followed survey.

The Federal Reserve Bank of Philadelphia's regional manufacturing gauge fell from a reading of 27.4 for March to 17.6 in April.

That was modestly below the 21.4 print that economists had been anticipating.

Back in London equity markets, BA owner IAG rose 6.17%, and budget airlines Wizz Air and easyJet ascended 4.41% and 4.89%, following well-received first-quarter results from United Airlines across the pond.

Pest control group Rentokil Initial grew 1.79% after it said 2022 started well, with strong momentum from the prior year continuing into the first quarter.

Brick and concrete product manufacturer Ibstock jumped 8.77% after saying its full-year performance was set to be "modestly ahead" of previous expectations following a strong start to the year, driven by stronger clay brick sales volumes and a resilient margin performance.

On the downside, gambling company Rank Group slumped 8.88% after it cut its full-year EBIT guidance, pointing to a softer performance in March and inflationary pressures.

Anglo American slid 8.83% after reporting that first-quarter production fell 10% year-on-year, impacted by peak Covid-related absenteeism, high rainfall affecting operations in South Africa and Brazil, and safety and operational challenges at coal and iron ore operations.

Miners in general were a drag, with Antofagasta losing 7.09% after a first-quarter production report, while Glencore and Rio Tinto were off a respective 5.63% and 1.79%.

"It's been a bad start to the year operationally for the big mining companies and their latest updates have served to act as a drag on the FTSE 100," said Russ Mould, investment director at AJ Bell.

"Hot on the heels of Rio Tinto's disappointing update was Anglo American flagging a tough first quarter and guiding for an increase in costs."

Mould said commodity producers had enjoyed soaring prices over the last year, but their "moment in the sun" could be ending.

"The key question now is whether commodity prices are close to their peak for this cycle as a reduction in selling prices together with rising costs will put a squeeze on profit margins."

Elsewhere, BAE Systems lost 1.09% as it traded without entitlement to the dividend.

Market Movers

FTSE 100 (UKX) 7,627.95 -0.02%
FTSE 250 (MCX) 21,159.68 0.36%
techMARK (TASX) 4,414.37 0.13%

FTSE 100 - Risers

ITV (ITV) 77.32p 6.56%
International Consolidated Airlines Group SA (CDI) (IAG) 152.90p 6.17%
Royal Mail (RMG) 354.70p 4.69%
Smith & Nephew (SN.) 1,302.50p 4.66%
Melrose Industries (MRO) 128.45p 3.55%
Rolls-Royce Holdings (RR.) 96.60p 3.40%
WPP (WPP) 1,033.00p 2.89%
Pearson (PSON) 789.00p 2.81%
Burberry Group (BRBY) 1,671.00p 2.74%
Aveva Group (AVV) 2,521.00p 2.52%

FTSE 100 - Fallers

Anglo American (AAL) 3,679.00p -8.83%
Antofagasta (ANTO) 1,514.00p -7.46%
Glencore (GLEN) 489.70p -5.63%
Legal & General Group (LGEN) 265.20p -4.54%
BAE Systems (BA.) 741.20p -3.06%
Endeavour Mining (EDV) 2,012.00p -2.71%
Entain (ENT) 1,538.50p -1.76%
National Grid (NG.) 1,162.50p -1.52%
Rio Tinto (RIO) 5,765.00p -1.45%
Rightmove (RMV) 627.00p -1.42%

FTSE 250 - Risers

Ibstock (IBST) 181.00p 8.77%
Polymetal International (POLY) 250.00p 6.97%
SSP Group (SSPG) 242.60p 6.12%
Aston Martin Lagonda Global Holdings (AML) 900.00p 5.16%
easyJet (EZJ) 591.20p 4.79%
WH Smith (SMWH) 1,502.00p 4.67%
Wizz Air Holdings (WIZZ) 3,150.00p 4.41%
Synthomer (SYNT) 298.20p 4.12%
Oxford Instruments (OXIG) 2,290.00p 4.09%
Spire Healthcare Group (SPI) 234.00p 4.00%

FTSE 250 - Fallers

Rank Group (RNK) 117.00p -8.88%
Trustpilot Group (TRST) 133.60p -6.44%
Moonpig Group (MOON) 201.40p -5.89%
Auction Technology Group (ATG) 914.00p -5.19%
Lancashire Holdings Limited (LRE) 393.40p -4.05%
Abrdn Private Equity Opportunities Trust (APEO) 492.00p -3.91%
888 Holdings (888) 196.30p -3.77%
Provident Financial (PFG) 257.80p -3.73%
IntegraFin Holding (IHP) 387.20p -3.73%
TP Icap Group (TCAP) 139.80p -3.32%
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