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LONDON (Alliance News) - UK stocks opened higher Friday as commodities-related stocks pushed higher, with miners led by Glencore and with oil-related stocks benefiting from a rise in crude prices.
The FTSE 100 index opened up 0.7% at 6,420.77, the FTSE 250 was up 0.6% at 17,112.99 and the AIM All-Share was up 0.2% at 734.59. In Europe, the French CAC 40 and the German DAX 30 were both up 0.8%.
Glencore led the blue-chip gainers at the open, up 5.1%. The multi-commodities miner announced a 500,000 tonne per year reduction of contained zinc metal mine production across its operations in Australia, South America and Kazakhstan, in order to preserve the value of its reserves in the ground "at a time of low zinc and lead prices".
This represents around a third of Glencore's annual zinc production, it said, and will reduce fourth quarter 2015 mine production by around 100,000 tonnes of contained zinc metal.
The FTSE 100 firm will suspend its operations at Lady Loretta in Australia and at Isaycruz in Peru, and will reduce operations at George Fisher and McArthur River in Australia, as well as various mine operations in Kazakhstan.
Glencore peers Anglo American, up 5.0%, Antofagasta, up 3.4%, BHP Billiton, 3.0% and Rio Tinto, up 2.0% also were amongst the biggest gainers in the FTSE 100.
Vendata Resources led the mid-cap risers, up 8.9%. The company reported a rise in production across most of its commodities in the first half of its financial year and said its net debt is expected to be below the USD8.0 billion mark as of the end of September.
The multi-commodity company said oil and gas production net to the company in the second quarter of 2015 rose 6% year-on-year to 205,361 barrels of oil equivalent per day from 194,508 barrels. Zinc production from India in the second quarter totalled 240,000 tonnes, up 13% year-on-year from 213,000 tonnes, and cost of production, excluding royalties, fell to USD771 per tonne from USD799 per tonne.
London's oil-related stocks were benefiting from higher crude prices, as Brent oil and West Texas Intermediate prices clung onto the gains seen Thursday after the London close.
Brent oil was at USD53.57 a barrel Friday morning, after a low of USD51.26 on Thursday, while WTI was at USD50.16 a barrel, having touched a low of USD47.75 on Thursday.
BG Group was up 1.5%, BP up 1.2% and Royal Dutch Shell 'A' up 1.0%. In the FTSE 250, Premier Oil was up 6.7% and Tullow Oil up 4.7%.
Petrofac, up 6.0%, said it has terminated the contract with ZPMC, the company that was constructing its Petrofac JSD 6000 deepwater multi-purpose offshore vessel over "issues with ZPMC's performance in respect of the construction" of the vessel.
Shares in FTSE 100-listed National Grid were sold at the open, down 1.3%, after Merrill Lynch downgraded the electricity and gas utility company to Neutral from Buy.
UK stocks are tracking the gains seen on Wall Street on Thursday and early gains early Friday in Asian stocks, after the US Federal Reserve released the minutes from its last monetary policy meeting.
The US central bank minutes said that downside risks to economic growth prevented a lift in US interest rates in September. Most Federal Open Market Committee officials, in a split vote 9-1, decided it would be "prudent" to wait for signs that problems overseas, especially in China, would dissipate.
FOMC members also were concerned about anaemic US inflation, which remains well below the Fed's 2% annual target rate. The central bank said it will consider raising interest rates before year's end, as policy makers "agreed that developments over the inter-meeting period had not materially altered the committee's economic outlook."
However, the meeting took place in September 16-17, a few weeks before the release of a disappointing US jobs report.
Federal Reserve Bank of Atlanta President Dennis Lockhart speaks before the Society of American Business Editors and Writers Fall Conference in New York at 1410 BST, while Chicago Fed President Charles Evans addresses the CFA Society Milwaukee "Economics and Monetary Policy Update", due at 1830 BST.
"With the latter expected to reiterate his consistently doveish stance towards the timing of a policy rate hike, markets are likely to pay more heed to Lockhart, who is viewed as more representative of the centre of gravity of the FOMC," said Jonathan Thomas, senior economist at Lloyds Bank.
After a mixed open, shares in New York ended broadly higher Thursday, with the DJIA up 0.8%, the S&P 500 up 0.9% and the Nasdaq Composite up 0.4%.
In Asia on Friday, the Japanese Nikkei 225 index closed up 1.6%. In China, the Shanghai Composite finished up 1.3% and the Hang Seng in Hong Kong trades up 0.6%.
In the economic calendar, UK good trade balance data are due at 0930 BST. In the US, export and import price indices are expected at 1330 BST, while wholesale inventories are due at 1500 BST. Meanwhile, the International Monetary Fund annual meeting takes place in Lima, Peru, lasting until Sunday.
By Daniel Ruiz; danielruiz@alliancenews.com
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