London Markets

April 6, 2021, 12:38 p.m. EDT

Mining stocks lead London higher in broad rally following U.S. record highs

By Jack Denton

Metals and mining groups led London stocks into a broad rally on Tuesday, as European equities played catch-up with U.S. stocks after the Dow and S&P 500 hit record highs on Monday while trading was closed for Easter Monday in Europe.

Antofagasta (LON:UK:ANTO) was the biggest winner in London trading, with shares in the mining giant more than 4% higher. Shares in peers Rio Tinto (LON:UK:RIO) , Anglo American (LON:UK:AAL) , Glencore (LON:UK:GLEN) , and BHP (LON:UK:BHP) also rallied.

In wider trading, the FTSE 100 (FTSE:UK:UKX) , the index of London’s top stocks by market capitalization, rose 1.28%, outpacing the pan-European Stoxx 600 (STOXX:XX:SXXP) and major indexes in Germany and France.

“The FTSE 100 was playing catch up after the Easter break, enjoying strong gains after global stocks rallied hard on Monday, supported by strong U.S. and Chinese economic data,” said Danni Hewson, an analyst at AJ Bell.

“The S&P 500 in the U.S. reached another record level overnight — an occurrence so regular it no longer feels like such a milestone but a catalyst for improved sentiment nonetheless,” Hewson added. “The rest of the week could see markets struggle for direction with relatively few big corporate announcements on the horizon.”

However, analysts noted that the continued spread of coronavirus infections in Europe remains a wider concern for markets in the week ahead.

“It’s likely that the COVID pandemic will continue to dominate, given the jitters in multiple countries over the rising case counts,” said Henry Allen, an analyst at Deutsche Bank.

“Europe has already been shifting towards tougher restrictions, with the French lockdown beginning on Saturday,” Allen added. “The main exception to this pattern has been the U.K. however, which has one of the most advanced vaccination programs in the world.”

Pub and restaurant stocks are saying cheers to the U.K.’s pathway to reopening from lockdown. Prime Minister Boris Johnson confirmed on Monday that outdoor hospitality businesses would be able to open on April 12, helping shares in FTSE 100 pub operator J.D. Wetherspoon (LON:UK:JDW) rise near 3%. 

Other pub, restaurant, and hotel stocks also rose, with shares in Marston’s (LON:UK:MARS) , Restaurant Group (LON:UK:RTN) , Whitbread (LON:UK:WTB) and InterContinental Hotels Group (LON:UK:IHG) higher.

BP (LON:UK:BP) stock was another standout in London, with shares in the oil major rising 3.8%. The group said it expects to hit its $35 billion net debt target earlier than expected — in the first quarter of 2021 — paving the way for share buybacks. The group’s net debt at the end of 2020 was $38.9 billion.

Financials were a key sector in Tuesday’s rally, with shares in HSBC (LON:UK:HSBA) , Barclays (LON:UK:BARC) , Lloyds (LON:UK:LLOY) , and Standard Chartered (LON:UK:STAN) all higher.

Shares in FTSE 100 energy company SSE (LON:UK:SSE) rose 4%, as the market welcomed news that the company’s contracting division would be sold to asset manager Aurelius Group for £27.5 million ($30 million). The sale was announced late on Thursday, before the beginning of the four-day Easter break in the U.K.

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