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Aug. 30, 2019, 7:33 a.m. EDT

Miners and cooling trade tensions extend British stock rally

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By Callum Keown


Getty Images
The Koniambo Nickel SAS metallurgical plant, belonging to Glencore and Societe Miniere du Sud Pacifique, in New Caledonia

British stocks continued to rally on Friday as miners made gains and investors remained optimistic over the U.S.-China trade war.

The FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -5.25% climbed 0.7%, lifted by cooling trade tensions and the blue-chip index’s mining giants.

The price of nickel surged to a near five-year high following a spillage in Papua New Guinea that boosted Rio Tinto /zigman2/quotes/208934945/delayed UK:RIO -5.92%  and BHP /zigman2/quotes/203323256/delayed UK:BHP -6.88% .

The domestically focused FTSE 250 /zigman2/quotes/210598417/delayed UK:MCX -3.97% shrugged off the struggling pound to enjoy 0.6% gains.

What’s moving the markets?

China’s positive comments on Thursday continued to lift British stocks as investors became more confident of a resolution to the trade war.

Beijing said discussions with U.S. negotiators were continuing and that it would not retaliate to the latest tariff increase.

On Friday, China’s foreign ministry confirmed that talks were continuing between trade teams on both sides.

A waste spill at a nickel plant in Papua New Guinea caused prices to spike toward five-year highs, providing a boost for the FTSE 100 miners.

The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +1.9912% held steady at $1.2178 after two days of losses following Prime Minister Boris Johnson’s move to suspend Parliament ahead of the scheduled Brexit date at the end of October.

U.K. lenders approved 67,306 mortgages in July, the highest since the middle of 2017, according to Bank of England data.

Michael Biemann, chief executive of digital property lender Selina Finance, said: “Mortgage approvals for house purchases hit a two-year high in July, suggesting that our looming departure from the EU is causing people to act rather than sit on their hands.

“Nobody knows quite what will happen if we leave the EU at the end of October and so people are taking action now, while they are still in control.”

Which stocks are active?

U.K. and Ireland-based building materials firm Grafton Group /zigman2/quotes/203516567/delayed UK:GFTU -8.00% rose 7.4% after a rise in first-half profit. The FTSE 250 company said strong performance in its merchant and retail businesses in Ireland, and good growth in the Netherlands, led the rise.

Rio Tinto shares climbed 2.3% off the back of surging nickel prices, caused by supply fears following a waste spill in Papua New Guinea. BHP, also a major nickel producer, jumped 2.2%, while Glencore edged up 1.6%.

/zigman2/quotes/210598409/delayed
UK : FTSE UK
5,510.33
-305.40 -5.25%
Volume: 834,872
March 27, 2020 4:45p
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/zigman2/quotes/208934945/delayed
UK : U.K.: London
3,528.00 p
-222.00 -5.92%
Volume: 4.79M
March 27, 2020 4:35p
P/E Ratio
9.23
Dividend Yield
9.94%
Market Cap
£60.93 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/203323256/delayed
UK : U.K.: London
1,187.60 p
-87.80 -6.88%
Volume: 9.92M
March 27, 2020 4:35p
P/E Ratio
8.16
Dividend Yield
9.49%
Market Cap
£64.49 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/210598417/delayed
UK : FTSE UK
14,769.80
-610.91 -3.97%
Volume: 315,974
March 27, 2020 4:46p
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/zigman2/quotes/210561263/realtime/sampled
US : Tullett Prebon
1.2447
+0.0243 +1.9912%
Volume: 0.0000
March 27, 2020 4:59p
loading...
/zigman2/quotes/203516567/delayed
UK : U.K.: London
546.00 p
-47.50 -8.00%
Volume: 1.43M
March 27, 2020 4:35p
P/E Ratio
8.77
Dividend Yield
1.19%
Market Cap
£1.41 billion
Rev. per Employee
N/A
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Callum Keown is a Barron's Group reporter for the Europe, Middle East and Africa region. He writes for MarketWatch, Barron’s, Penta and Financial News.

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