Mining stocks drive FTSE to all-time closing high

Iseq heading for first annual fall in six years unless it surges 4.4% in next day and a half

London’s FTSE 100 stood out on an otherwise quiet trading day on Wednesday, as the blue-chip UK stocks index registered an all-time closing high, buoyed by strong gains by mining stocks. The broader pan-European index, the Stoxx 600, added 0.3 per cent, to 361.53 points. While European markets were closed on Monday, traders in the British and Irish equity markets also enjoyed a day of rest on Tuesday, after closing early on Friday.


The Iseq Index was left out of the fun in Europe as it traded down 0.4 per cent to 6,490.60. It is poised to post its first annual decline in six years, unless it can surge more than 4.4 per cent in the last day and a half of trading left in 2016.

Banks were out of sorts, with Bank of Ireland falling 4.32 per cent to 23.5 cent, while Permanent TSB lost 1.8 per cent to €2.75. Ryanair fell by 1.91 per cent to €14.60 as oil prices, as measured by ICE Brent futures, rose 0.5 per cent to $56.38.

Irish mining company Kenmare Resources jumped 5.4 per cent in London after it revealed after markets closed last Friday that it will pay $5 million to a company called Aveng, which had provided engineering and construction services to the Irish group in connection with the expansion of its Moma mineral sands mine in Mozambique in 2010. The payment, resulting from arbitration between both companies, was about a third of what Aveng had claimed, plus interest.


Total Produce advanced as much as 2.1 per cent after US asset manager Franklin Templeton increased its stake in the company to 8.05 per cent, from 7.22 per cent. However, the stock ended the session down 0.2 per cent.


The FTSE 100 ended the session 37 points higher at 7,106.08 points, to beat a previous record closing level of 7,103.98 which was set in April last year. The index has managed to gain 12 per cent since the day of the Brexit referendum.

Mining companies led the onward march on Wednesday, on hopes of strong US economic growth next year, which would increase demand for metals. Silver miner Fresnillo and gold producer Rangold each advanced by almost 5 per cent, while BHP Billiton gained 4.2 per cent and Rio Tinto 3.3 per cent.

"The FTSE 100 is the star performer today, helped on its way higher by an excellent turn from the index's mining contingent," said Chris Beauchamp, chief market analyst at IG in London. "The sector was one of the really big winners in 2016, making a remarkable comeback over the past 12 months, and it makes sense to think that investors are looking to juice a few more points out of the rally as the year end approaches."


Italian banks made limited gains for the pan-European Stoxx 600 index as investors continued to fret about news late on Monday that the European Central Bank found that ailing lender Monte dei Paschi's capital shortfall was far higher than the €5 billion expected by the government last week. Shares in Banca Popolare di Milano Scarl lost 2.7 per cent, while Unione di Banche Italiane dropped 3.3 per cent.

Airbus dropped 0.3 per cent after the plane manufacturer said it was cutting production of its flagship A380 superjumbo next year.


US stocks retreated from near records in light early afternoon trading, with the Dow Jones Industrial Average failing anew in its quest for 20,000. The blue-chip index came within 19 points of the milestone shortly after the open, before slipping into negative territory, as losses in Boeing offset Goldman Sachs's 0.9 per cent gain. Boeing fell after Delta Air Lines said on Tuesday that it had reached an agreement with the planemaker to cancel a $4 billion order for 18 Dreamliner aircraft.

By early afternoon, the Dow Jones Industrial Average was down 51.22 points, or 0.26 per cent, at 19,893.82. The S&P 500 lost 0.58 per cent, while the Nasdaq Composite was down 0.62 per cent.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times