FTSE 100 surges toward fifth consecutive win at yearly highs
U.K. stocks edged ground Monday, recording another new high for 2016, as miners got a boost from buoyant metals prices.
The FTSE 100 was up 0.2% at 6,588.03, but losses for financial and consumer services shares limited the benchmark’s advance.
The blue-chip index on Friday rose 1.1% to end at a 6,577.83, the second consecutive record high for the year. A win Monday would mark the London benchmark’s fifth rise in a row.
Last week, the FTSE 100 surged 7.2%, for its largest weekly gain since early December 2011, according to FactSet data. The recovery from a sharp Brexit-fueled drop came as the U.K. government showed little sign of triggering Article 50, the start of formal negotiations for the country to leave the European Union, after the June 23 referendum.
“With Independence Day in the U.S., markets have continued a somewhat cautious recovery … as the settling period in the post-Brexit world continues to play out,” said Richard Perry, market analyst at Hantec Markets, wrote in a note.
“Sterling has bounced slightly early today, however there is still a sense that safer haven plays will retain a bid with gold pushing higher and the yen also supported,” he added.
Markets in the U.S. are closed Monday for the July 4th holiday.
Metal moves: Mining shares occupied the top spots on the FTSE 100 as metals prices rose, with gold futures up 1% at $1,352.80 and silver futures higher by 3.2%.
Shares in precious metals producer Fresnillo PLC shot up 8.2%, and those in Randgold Resources Ltd. climbed 3.9%. The moves added to last week’s share-price gains of 27% and 19%, respectively, which came as metals prices and miners shares benefited from investors looking for safety.
“[A]lthough equities showed every sign of being involved in a ‘risk-on’ rally last week, that did not prevent gold from notching up a fifth consecutive weekly gain,” wrote Bill McNamara, technical analyst at Charles Stanley, in a note.
Other movers: Retailer Marks & Spencer Group PLC shares fell 1% following a ratings downgrade to hold from buy at Investec. “M&S is in a better position vs. pre-financial crisis with self-help opportunities and strong cash generation, but it is difficult to see profit growth in a weaker environment,” wrote analyst Kate Calvert.
Given recent retail industry sales data, a weak first quarter is expected at M&S, Investec added.
Other retail shares were under pressure, with apparel seller Next PLC down 1.5% and luxury-goods producer Burberry Group PLC off 1.2%.
Rio Tinto PLC shares added 1.4%, after its new chief executive, Jean-Sébastien Jacques, took over the reins of the commodities company on Saturday. Jacques laid out his plans for Rio Tinto in an interview with The Wall Street Journal on Sunday. “The growth strategy of Rio going forward will be: Build and buy smart,” the new CEO told the WSJ.
The pound was buying $1.3285, up from $1.3258 late Friday in New York.
Source: MarketWatch
