LONDON MARKET MIDDAY: Miners out front as stocks continue to rally

Mining shares were leading the FTSE 100 on Monday, as the London stock market picked up where it left off on Friday, rising on hopes the current monetary policy tightening cycle will be less severe than once feared.

This comes as central bank chiefs and economists gather Monday evening at their annual forum in Portugal to discuss the best approach to the inflationary challenges exacerbated by Russia's invasion of Ukraine.

Some 200 delegates will attend the ECB Forum on Central Banking at a luxury hotel in Sintra, near Lisbon, after two years of Covid-imposed virtual gatherings.

When ECB President Christine Lagarde last attended this event, it was in her previous role as director general of the International Monetary Fund back in 2014. Also attending will be Jerome Powell, chair of the US Federal Reserve, and Andrew Bailey, governor of the Bank of England.

The FTSE 100 index was up 40.03 points, or 0.6%, at 7,248.84 midday Monday. The large-cap measure had closed up 2.3% on Friday and had added 2.7% for all of last week.

The mid-cap FTSE 250 index was up 217.63 points, or 1.1%, at 19,341.05. The AIM All-Share index was up 8.39 points, or 0.9%, at 904.66.

The Cboe UK 100 index was up 0.1% at 723.50. The Cboe 250 was up 0.9% at 16,934.33, and the Cboe Small Companies up 0.5% at 13,567.71.

In mainland Europe, the CAC 40 stock index in Paris was up 0.3%, while the DAX 40 in Frankfurt was up 0.8%.

AJ Bell's Russ Mould noted the UK flagship index was being driven by miners ‘regaining favour with investors after a patchy session last week caused by a retreat in metal prices’.

Anglo American was the best performer, up 3.3%, followed by Rio Tinto up 3.2% and Glencore up 3.1%.

‘With big dividends on offer, investors have clearly been hovering over the 'buy' button following recent share price weakness and today seems to be the day these mining names are being added to portfolios once again,’ Mould commented.

Oil majors Shell and BP also were up, rising 1.5% and 0.9% respectively, tracking spot oil prices higher.

Brent oil was trading at $113.68 a barrel Monday at midday, up from $113.44 late Friday.

Conversely in the FTSE 100, Ocado was down 1.9% after Credit Suisse downgraded the online grocer to 'neutral' from 'outperform'.

In the FTSE 250 index, PZ Cussons was up 2.2%.

The personal care products maker said trading for the fourth quarter to May 31 continued to be in line with expectations despite a challenging business environment.

PZ Cussons said it expects revenue for the financial year that ended May 31 of £590 million, with full-year like-for-like revenue growth of 3% and fourth-quarter growth on the same basis of 7%.

PZ Cussons recorded revenue of £603.3 million in financial 2021. Pretax profit was £63.2 million, more than triple £18.3 million the year before.

The company said revenue at its Must Win Brands division recovered, growing 4% in the fourth quarter. Must Win Brands comprise of Carex, St Tropez, Sanctuary Spa, Premier Cool, Joy, Cussons Baby, Morning Fresh and Original Source. Back in September of last year, PZ Cussons said Must Win Brands revenue had declined 20% year-on-year in the first quarter.

At the other end of the midcaps, Biffa was down 1.4% at 401.40 pence. The waste management company said the release of its financial 2022 results will be delayed, as it has requested additional time to complete the audit procedures related to its landfill tax enquiry.

Biffa said the results will be released as soon as auditor Deloitte has completed its work and expects adjusted results in line with earlier trading updates. Biffa's financial year ended in March.

Earlier this month, Biffa said it had received a series of ‘unsolicited and indicative’ proposals from private equity firm Energy Capital Partners, an investor in the fields of energy transition, renewables and infrastructure. It said it was ‘minded to recommend’ a possible offer of 445p per share in cash, valuing Biffa around £1.36 billion.

On AIM, CareTech was up 21% at 739.00p.

The residential social care and education services provider accepted a £870.3 million takeover bid tabled by a consortium that features the firm's founders. The offer from Amalfi Bidco, a consortium which includes CareTech founders Farouq and Haroon Sheikh and THCP Advisory, has the support of over 50% of shareholders.

The consortium will pay a 750p cash consideration, a 28% premium to CareTech's share price on March 4, the day before the Sheikh brothers said they were in the ‘early stages’ of forming a takeover consortium.

The offer is expected to become effective in the third quarter.

The pound was quoted at $1.2278 at midday on Monday, hardly changed from $1.2282 at the London equities close Friday. Earlier Monday, the pound had traded above $1.23.

The euro was priced at $1.0570, up from $1.0549. Against the yen, the dollar was quoted at JP¥135.04 in London, lower against JP¥135.10.

Four G7 powers will ban Russian gold exports in a new bid to stop oligarchs from buying the precious metal to avoid the impact of sanctions against Moscow.

Gold stood at $1,838.86 an ounce, higher against $1,830.41 late Friday.

The joint action taken by Britain, Canada, Japan and the US, ‘will directly hit Russian oligarchs and strike at the heart of [President Vladimir] Putin's war machine,’ said UK Prime Minister Boris Johnson. Given London's central role in the international gold trade and parallel US, Japanese and Canadian action, ‘this measure will have global reach, shutting the commodity out of formal international markets,’ Britain said.

Worth $15.5 billion to the Russian economy in 2021, gold is a major export for the country.

New York was pointed to a higher open on Monday, looking to build on Friday's strong rally.

The Dow Jones Industrial Average was called up 0.3% and the S&P 500 up 0.4% and the Nasdaq Composite up 0.6%. The indices had added 2.7%, 3.1% and 3.3% respectively on Friday.

Monday's economic calendar has US durable goods orders data at 1330 BST.

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