Leading shares are moving higher in tandem with other global markets, after Friday’s disappointing US job numbers convinced investors that the Federal Reserve was unlikely to raise interest rates this year after all.
Commodity companies are among the main gainers, with emerging markets likely to benefit if the Fed does keep borrowing costs on hold.
Glencore has surged 6% to 100.8p on talk it could be subject to a takeover or might sell its agribusiness. But the shares are off their best levels, and are nowhere near as high as the increase in Hong Kong, as the company said it knew of no reason for the rise.
Elsewhere BHP Billiton is up 20.5p at 1062.5p while Rio Tinto has risen 57p to £22.99.
ITV is shrugging off England’s premature departure from the Rugby World Cup despite weekend talk the broadcaster could lose out on £1m of revenue per match as advertisers cut back spending with the host’s early exit. Its shares are up 2.7p at 250.5p, and analyst Ian Whittaker at Liberum listed a number of reasons why ITV should not be hit too badly:
(1) TV advertising slots tend to be booked 4-6 weeks in advance so virtually all the slots for October would already have been booked (there might be a bit of lack of late money but that is at the margins) so advertising revenues unlikely to be significantly impacted (especially as sponsorship revenues have also already been booked);
(2) a more credible issue is the impact on audience share - however, again, likely to be minimal especially if the other Home Nations stay in - as October is 1 month out of 12 and the Rugby World Cup is turning out to be an attractive spectacle;
(3) The fourth quarter programming schedule is likely to be strong regardless (Downton, X-Factor, new dramas). Buy on any weakness.
Overall the FTSE 100 is up 116.10 points at 6246.08, despite disappointing UK services data which adds to the expectation that the Bank of England will be in no hurry to raise UK rates.
Standard Chartered has added 23.5p to 690.2p, benefiting from the more positive mood about emerging markets while Lloyds Banking Group is up 1.21p at 77.76p as the government unveiled plans to sell £2bn worth of the bank’s shares to the public.
Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said:
The 5% discount is equivalent to just 3.8p per share, whilst the sale overall is light even of the Royal Mail IPO, which weighed in at around £3.3bn.
Nonetheless, it does provide a welcome opportunity for smaller investors to at least participate in a fraction of the sell-off, in what is currently a well-regarded bank, seen as something of a barometer for the UK economy. With a projected dividend yield which could nudge 4% and interest rates remaining in the doldrums, you can see this being of interest to income seeking investors in the current environment.
The market consensus of Lloyds is a buy could comfort those looking to pick up some shares.
Tesco has added 7.25p to 187.10p ahead of half year results later in the week.
