FTSE closes marginally down, as Dow passes 31,500 for first time

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The FTSE 100 closed marginally in the red for the day, with early morning gains reversing after a tepid US opening saw optimism ebb away.

The UK’s blue chip index ended down 9 points, or 0.1%, at 6,747, ending a three day streak of gains.

The Dow Jones edged up a meagre 65 points, which was enough to claw over the 31,500 mark for the first time, but recent strength was tempered by concerns about American covid vaccine supplies running low.

Back in the UK, HSBC (HSBA)was the top performer, up 4.51%, as the banks were strongly in demand, along with miners.

The FTSE 250 was flat at 21,416.

09:50am FTSE lifted by mining stocks as Glencore reinstates dividend

The FTSE 100 climbed to a one-month high as miners followed commodity prices upwards and Glencore (GLEN) reinstated its dividend.

The main index moved 27 points, or 0.4%, higher to 6,783, racking up a fourth day of gains. Sterling’s rise did little to hold the internationally focused index back as the pound continued its ascent, adding 0.2% to trade at $1.3933 against the dollar.

Miners were the leaders on the blue chip board this morning, with Glencore up 2.6%, or 7p, at 289p as it reinstated its dividend at $0.12 a share after reducing net debt below its $16bn target.

Susannah Streeter, analyst at Hargreaves Lansdown, said the market was also pleased to hear of Glencore’s commitment to net-zero carbon emissions by 2050, making it the first miner to align targets with the Paris agreement on climate change.

‘Management clearly sees much opportunity in shifting focus to commodities like copper and cobalt to power the green transport revolution,’ said Streeter.

BHP (BHP) was also up, gaining 0.7%, to trade at £22.44 after its interim results reported a 17% rise in operating profit in the half year.

Richard Hunter, analyst at Interactive Investor, said the stock was boosted by ‘increasing talk of a commodity super-cycle’ and ‘the surge in the price of copper and iron ore is playing into the hands of the miners’.

Rio Tinto (RIO) climbed 1.7% to £62.92 and Anglo American (AAL) advanced 1.4% to £28.34.

The winners on the FTSE 250, which added 0.2%, or 53 points, to trade at 21,472, were much the same as yesterday, with the addition of Serco (SRP) which moved to the top of the mid-caps, gaining 6.6%, or 8p, to trade at 127p.

The outsourcing group was bolstered by news of its $295m deal with US defence business WBB, which has been a partner of the US Air Force for 30 years.

Cinema chain Cineworld (CINE) added 5.4% to trade at 87p and travel operator Tui (TUI) was up 5.1% at 36p, both continuing to benefit from hopes of a return to normal life in the UK as the Covid-19 vaccination programme continues its rapid roll-out.

In investment trust news, GCP Student Living (DIGS) moved 0.6% higher to 151p after terminating its lease with WeWork with immediate effect. WeWork had leased spaces within its Scape Shoreditch student accommodation. The fund collected £3.1m in arrears and rent due to the end of June and had previously announced WeWork’s arrears totalled £2.3m.

JLEN Environmental Assets (JLEN) group lost 0.8% to trade at 114p after it proposed changes to its investment policy to expand ‘environmental infrastructure’ to include battery storage projects, low carbon agriculture, and district heating among others. It also wants to extend its geographic remit outside of the OECD to other EU countries but retaining 50% of its portfolio in the UK.

LXI (LXI) eased 0.9p or 0.7% to 127.5p as the long-lease real estate investment trust sought to raise £75m with the issue of up to 60.2m shares at a price of 124.5p per share.

AVI Japan Opportunity (AJOT) firmed 0.4p or 0.3% to 113.4p after raising £13.9m in a share placing at 115.07p.