Leading shares have edged higher in early trading, but if not for Vodafone the market would be barely changed, despite yet another new record close on Wall Street.
Commodity companies are proving a drag, as the oil price continues to slip. Brent crude is down 0.16% to $82.21 a barrel, pushing Royal Dutch Shell B shares 16p lower to £23.20.
Mining shares have lost ground on continuing concerns about a slowdown in China, a key consumer of commodities. Mexican precious metals specialist Fresnillo has fallen 19.5p to 715.5p while Anglo American is down 30p to 1330.5p. Sentiment has been dented by Citigroup slashing its forecasts for iron ore prices.
But Vodafone has jumped 4.8% or 10.25p to 218.10p after it edged its full year earnings forecast higher after an improved performance in its key European markets. It also plans a push into new products such as a broadband and TV service in the UK.
The mobile phone group’s rise has added nearly 11 points to the FTSE 100. That effectively accounts for all the current rise in the leading index, which is up 11.73 points at 6622.98. But Mike McCudden at Interactive Investor said further gains were possible:
With investors, having nursed their wounds after a typically traumatic period for equities, the stage looks set for some realistic gains from here. A surge in positive corporate earnings from the US and eurozone should help restore some confidence but many investors, well aware we are not out of the woods yet, will be looking for more green shoots from the global outlook before they return. However, while global economic conditions keep us in a low interest rate environment equities should be the only show in town.
J Sainsbury has recovered some of Monday’s falls ahead of its latest update and strategy review due on Wednesday. It is 3.8p better at 258.5p while Tesco has slipped 3.2p to 189.7p, reversing the trends of the previous day.
Among the mid-caps engineering group Renishaw has risen 204p or 11.5% to £19.72 after it forecast a 20% to 25% rise in full year revenues and a 35% to 50% increase in profits. It has benefited from new launches by Apple since it sells tools to manufacturers of the US group’s products.
But Afren has lost 3.7p to 78.75p following an update on its operations in Nigeria, which confirmed it would deliver full year production at the lower end of guidance.
