Wednesday, 24 June 2015 17:34
LONDON: Britain’s top share index turned lower after touching a three-week high on Wednesday, still outperforming euro zone shares as strength in the mining sector insulated the index from the latest concerns over the Greek debt crisis.
The blue-chip FTSE 100 index hit 6,873.43 in morning trade, its highest level since June 4. It had turned lower to trade up just 14.50 points, or 0.3 percent at 6,849.37 points by 1024 GMT, after Greece said that international lenders had rejected its latest proposals to end a stand-off over debt and avoid default.
The index outperformed euro zone indexes, which traded in negative territory, supported by mining and energy stocks on the back of firmer commodity prices and a rally in retailers supporting the market. Miners were in demand, with the UK sector index rising 0.7 percent, tracking rises in major industrial metals such as copper and aluminium.
“A rise in metals prices and recent data showing an improvement in Chinese manufacturing are providing a tailwind to the market, but investors will continue to be cautious as we haven’t yet seen a firm direction for commodity prices,” said Keith Bowman, equity analyst at Hargreaves Lansdown.
The UK oil and gas index gained 1.4 percent, the top sectoral gainer, after oil prices rose on hopes for stronger than expected US crude demand, while doubts over the prospect of reaching an agreement next week on Iran’s nuclear programme eased oversupply concerns.
Shares in BG Group, Royal Dutch Shell, Anglo American, BHP Billiton and Rio Tinto rose 0.7 to 2 percent. Investors also showed interest in retailers after a positive sector note from Societe Generale. J. Sainsbury rose 2.5 percent to 276 pence, the top gainer in the FTSE 100 index, after the bank raised its stance on the stock to “buy” from “hold” and lifted its target price to 315 pence from 260 pence.
“We think that the group’s profile is more resilient than many fear, thanks to its strong differentiation (clear focus on quality and in-store services) and efficient marketing policy,” Societe Generale analysts said in the note. Shares in Tesco and Morrisons rose 1 percent and 2.9 percent respectively.