With leading shares heading lower, investors are seeking the usual havens, giving a boost to precious metals.
Gold and silver have both moved higher, with the dollar weakening, and helping Mexican miner Fresnillo to the top of the FTSE 100, up 13p at £11.08, while Randgold Resources has risen 60p to £65.85.
Anglo American was also in demand, up 8.9p at 762.1p, while Rio Tinto has climbed 2.5p to £23.32. Anglo announced the $1.5bn sale of its niobium and phosphates business in Brazil on Thursday to China Molybdenum, and UBS analysts said:
We see the proposed deal as a positive catalyst for the stock, as it reduces leverage and builds credibility of managment’s plan.
[But the] next divestments may be more challenging...We believe it will be challenging to sell nickel, iron ore and coal assets at attractive prices in the current environment, albeit the recent recovery in prices (met-coal, iron ore), pick up in diamond sales, and improvement in credit markets reduces the risk and allows Anglo to be selective (from a timing and asset perspective).
But British Airways owner International Airlines Group is down 21p at 530p, despite a jump in first quarter operating profit from €25m to €155m as it warned that current trading had been hit by the aftermath of the Brussels terror attacks. It added:
As a result IAG has moderated its short term capacity growth plans.
The news has hit other travel and leisure shares, with easyJet down 30p at £14.85 and InterContinental Hotels 52p lower at £27.33.
Among the mid-caps Restaurant Group, the owner of Frankie & Benny’s and Garfunkels, has slumped 25% to 282.3p after it warned on full year profits and announced its finance director had left with immediate effect.
The company said profits would be down between 2.5% and 5% to £74m to £80m, hit by lower footfall at shopping centres as consumers spent money online and higher competition from pubs and rival restaurants.
Elsewhere Royal Bank of Scotland has dropped 6.6p to 238.2p after it reported a first quarter loss of £968m, up from £459m the same time last year and higher than analysts had been expecting.
Overall the FTSE 100 has fallen 50.36 points to 6272.04, following an late fall on Wall Street overnight and poor performances from Asian markets. Tony Cross at Trustnet Direct said:
We’re seeing some notable losses in early London trade as disappointing sessions in the US and Asia have combined with generally lacklustre earnings and a downbeat UK consumer confidence reading, leaving at least some investors looking for a way out.
