Daily market update: BHP, Antofagasta, InterContinental Hotels, Debenhams

The FTSE 100 continues to edge quietly higher and is comfortably outperforming the US stock market so far this year.

The FTSE 100 is up 5.6% versus a 0.1% decline in the S&P 500. The gap is even wider against the tech-heavy Nasdaq index which is down 3% year-to-date.

Driving the UK market higher on Tuesday was a rebound in the plethora of stocks that sold off in recent weeks on fears of AI disruption. It was almost as if investors had scouted for the most affected names and bought everything on the list. Relx, Experian, Sage and Autotrader were all in the club and featured in the FTSE 100’s top risers’ list.

Millions of pounds have been wiped off these names this year thanks to the launch of rival AI services. Investors initially panicked but might now be taking the view that too much bad news is now in the price and these names could have what it takes to fight off AI disruption.

Gold dipped below $5,000 per ounce despite the US and Iran holding talks in Geneva to address a nuclear dispute. The price movement in gold would suggest investors are not particularly nervous about the negotiations, otherwise one might have expected strong demand for the precious metal. However, investors will be watching the talks closely.

BHP / Antofagasta

The roll-out of AI data centres and electric vehicle and renewable energy infrastructure is heavily reliant on copper. That’s why there is such a scramble for the metal and why miners are benefiting from record prices.

This copper-mania is evident in the latest numbers from BHP and Antofagasta. Copper contributed the largest share of BHP’s profit for the first time and there is a good chance it will remain top of the pile for the foreseeable future.

BHP may have failed in its efforts to combine with Anglo American as a way of increasing its exposure to copper but a series of smaller deals have helped it to maintain its position as the largest producer of the metal in the world.

As the company increases in scale, achieving meaningful growth gets harder and getting to the targeted 2.5 million tonnes of production by the mid-2030s will be a big ask.

Antofagasta is a smaller and purer play on the copper price but has nearly doubled in value in the last year to reflect exposure to a red-hot commodity. In this context just presenting the market with in-line earnings, albeit at a record level, and reporting a slight drop in output is enough to see the shares lose some momentum.

The business still looks healthy on several metrics, with limited debt, lots of cash flow, and capital expenditure starting to ease off. Antofagasta’s challenge in terms of future growth is finding opportunities and assets which do not dilute the quality of what it already has.

InterContinental Hotels

InterContinental Hotels has dangled two big rewards to get investors to check in with the business in the form of a double-digit dividend increase and substantial new share buyback.

IHG’s ability to demonstrate generosity towards shareholders reflects a strong showing in Europe, the Middle East and East Asia which reflects a better-than-expected 2025 showing for the group as whole.

It wasn’t all good news. Trading in the Americas was only a little better than flat and its Chinese business remains stuck in reverse.

Overall, this was a solid showing from IHG, particularly given the softness in its largest market. The company will be hoping the World Cup can help revive a US tourist trade which has been affected by recent tensions across the Atlantic.

Because InterContinental only owns a small proportion of its hotels and instead focuses on franchising and managing premises, it can generate strong margins and grow without employing lots of capital. The company is taking advantage of that flexibility as it develops a growing pipeline of new sites.

Debenhams / Boohoo

Dan Coatsworth, Head of Markets at AJ Bell, comments:

Boohoo’s parent company is to capitalise on the sharp improvement in its share price since November and issue new stock to raise £35 million to improve its balance sheet.

The share price has more than doubled in the past three months on positive signs of a turnaround in the retailer’s fortunes.

The new shares will be issued at an 11% discount to last night’s closing price, which is enough of a sweetener to get investors to part with their cash without giving away too much.

Getting debt under control is a gamechanger for attracting a wider pool of investors and convincing the market that the company has a solid future. The company is certainly making the right noises regarding its comeback, but success is not a given when you consider the highly competitive nature of fashion and beauty retail.

There is still a lot of work to be done. Debenhams needs to keep cutting costs and find a way to grow sales across the business without resorting to massive discounting.