LONDON MARKET MIDDAY: Commodities continue to give FTSE 100 boost

(Alliance News) - The FTSE 100 in London was higher at midday on Thursday, holding onto Wednesday's gains and boosted by commodities.

The FTSE 100 index was up 56.11 points, 0.7%, at 7,644.31. The FTSE 250 was up 134.49 points, 0.7%, at 19,457.01, and the AIM All-Share was up 0.1 of a point at 766.22.

The Cboe UK 100 was up 0.6% at 762.42, the Cboe UK 250 was up 0.9% at 17,096.32, and the Cboe Small Companies was up 0.7% at 13,719.37.

The cheerful mood, after stocks rallied on Wednesday on a shock UK inflation print, continued on Thursday. The reading showed consumer prices rose 7.9% annually in June, cooling from 8.7% the month before, and below estimates of 8.2%.

In European equities on Thursday, the CAC 40 in Paris was up 0.3%, and the DAX 40 in Frankfurt was up 0.2%.

At midday on Thursday, Anglo American was up 5.0%, putting it towards the top of London's large-caps.

The miner said production rose 11% year-on-year in the second quarter, which reflects the ramp-up of its new Quellaveco copper mine in Peru. The mine has now reached commercial production levels. It also noted a strong showing from its Minas-Rio iron ore operation in Brazil, and higher production from its Australian open-cut operations in steelmaking coal.

Copper production rose 56% year-on-year to 209,000 tonnes, iron ore rose 8.3% to 15.6 million tonnes, and steelmaking coal rose 28% to 3.4 million tonnes. Meanwhile, nickel fell 3.9% to 9,900 tonnes, while platinum group metals fell 8.6%, diamonds fell 3.8% and manganese ore fell 1.0%.

Fellow miner Glencore was up 3.6%, ahead of Friday's trading statement. Antofagasta rose 3.8%, having lowered its annual production guidance on Wednesday.

Commodity stocks were boosted, as the People's Bank of China said it held its one-year loan prime rate - which serves as a benchmark for corporate loans - at 3.55%. The five-year rate remained at 4.20%.

In the FTSE 250, Babcock International was up 9.6%.

In the financial year that ended March 31, the London-based aerospace, defence and nuclear engineering services company said its pretax profit fell 97% to GBP6.2 million from GBP182.3 million.

This was caused by a GBP100.1 million in costs for the year incurred from the Type 31 frigates dispute, representing a GBP42.6 million revenue reversal and a GBP1.6 million impairment, and the recognition of a GBP55.9 million contract loss caused by the commencement of a dispute resolution process with the Ministry of Defence over the contract costs of Type 31 frigates.

However, looking ahead, Babcock said it expects financial 2024 to be a year of organic revenue growth and that its expectations for profitability and cash flow were unchanged.

Berenberg analyst George McWhirter described the results as "strong" and noted that they are comfortably ahead of Berenberg's estimates and consensus. He also noted that "top-line visibility is good", in the year looking ahead.

Amongst London's small-caps, Lookers was down 14%.

The agreed takeover offer for the car dealer by a Canadian peer is declared dead in the water, as Lookers' largest shareholder withdraws the letter of intent it had given to bidder Global Auto Holdings. Global Auto is the bidding vehicle of Alpha Auto Group Holdings, a Toronto-based operator of auto retail dealerships across North America.

Last month, it had offered to pay 120 pence per share for Lookers, which is based outside of Manchester.

Cinch withdrew its letter of intent to accept the offer for its stake of just over 19% in Lookers and now intends to vote against the acquisition, Lookers said.

Liberum's Sanjay Vidyarthi said: "It may be that Cinch is looking to put its own bid in for Lookers or it may be that others are in the background. Our view was that the offer at 120p was low, valuing Lookers on 8 times, so we do see an opportunity for a higher bid to come through."

On AIM, Amte Power plummeted 47%, after is said its financial situation is "becoming ever more critical."

Amte is a London-based lithium-ion and sodium-ion battery cells developer and manufacturer.

Amte said that it now needs to implement a solution "within the next few business days."

It said that whilst there are active discussions with existing and potential investors, there can be no certainty of the outcome. This means that the case of Amte being placed into administration is becoming ever more likely.

The pound was quoted at USD1.2910 at midday on Thursday in London, higher compared to USD1.2890 at the equities close on Wednesday. The euro stood at USD1.1211, higher against USD1.1197. Against the yen, the dollar was trading at JPY139.45, lower compared to JPY139.65.

Stocks in New York were called mixed. The Dow Jones Industrial Average was called up 0.1%, whilst the S&P 500 index down 0.2%, and the Nasdaq Composite down 0.8%.

Earnings season is in full swing over in the US, with Netflix and Tesla earnings coming through overnight.

On Thursday, the international corporate calendar has half-year results from American Airline and Johnson & Johnson.

Brent oil was quoted at USD79.51 a barrel at midday in London on Thursday, down from USD80.39 late Wednesday. Gold was quoted at USD1,983.02 an ounce, higher against USD1,975.43.

Still to come on Thursday's economic calendar, there is the US weekly unemployment claims report at 1330 BST.

By Sophie Rose, Alliance News reporter

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