Markets are, not surprisingly, trading in a rather hesistant fashion given the continuing uncertainty in Greece, with MPs due to vote on the bailout agreement agreed on Monday and the IMF casting doubt on the economics of the deal.
But with better than expected Chinese economic data, a number of mining shares are bucking the downward trend.
Anglo American has added 7.1p to 876.6p, also helped by an upgrade from Credit Suisse, partly on the basis it could be a bid target. Analyst Liam Fitzpatrick said:
We upgrade Anglo from neutral to outperform: a wide valuation gap has opened versus peers with the sell-off balance sheet rather than earnings led. We think at current levels investor focus should switch to the underlying asset value; Anglo is trading below its 2008/09 crisis lows and a large discount to peers. At these levels M&A risk can’t be ignored and we see up to 30% upside potential if the company can deliver on its restructuring goals and up to 50% if this is joined by an apparent demand recovery in China in the second half of 2015.
The signs from China are certainly more positive after recent concerns about a slowdown, and a rout on its stock market. Second quarter GDP was estimated to have grown at an annual rate of 7%, higher than the expected 6.9% and in line with government targets.
So Rio Tinto has risend 5p to 2585.5p but BHP Billiton is down 5.5p at 1230.5p after it announced it would take a $2bn charge against the value of its US onshore energy operations.
Overall the FTSE 100 has fallen 17.54 points to 6736.21, ahead of UK employment and wages figures.
Burberry is the biggest loser in the leading index, down 49p at £15.71 after it reported slowing sales growth in the first quarter, with a deterioration in the Hong Kong market. Revenues rose 8%, below the 13% growth seen in the second half.
