Despite a dip during the morning, the FTSE 100 is set for its fourth monthly rise in a row even though investors are still cautious about the state of the global economy.
An early rise followed news of a positive performance from China - which shrugged off a brief but hefty flash crash to enjoy its best day since February. Dealers pointed to suggestions that mainland Chinese stocks would soon be included in the MSCI global indices. There was also speculation that Japan’s prime minister Shinzo Abe might postpone next year’s scheduled sales tax rise until late 2019, which helped sentiment.
But there is some hesitation ahead of a number of key events this week, not least the European Central Bank’s latest meeting and the US non-farm payroll figures, the last before the Federal Reserve interest rate decision in June.
Overall the FTSE 100 has slipped 12.22 points to 6258.57.
Anglo American has edged 1.3p lower to 610.7p despite a report in the Australian that Glencore, down 1.1p at 133.2p was planning to team up with private equity group Apollo to bid for Anglo’s Grosvenor and Moranbah coal mines in Queensland.
With Brent crude down 0.84% at $49.34 ahead of an Opec meeting this week and the continuing strength of the dollar on rate rise expectations, other commodity companies are also lower. BHP Billiton is down 15.2p at 825.1p while BP has fallen 6.5p to 355.45p.
Among the mid-caps Alliance Trust has added 17.5p to 526p as RIT Capital made an informal merger approach.
Zoopla Property is up 8.3p at 328.8p as analysts at Jefferies issued a buy note after the online portal’s positive first half update last week. Lifting its price target from 415p to 430p, Jefferies said:
Zoopla is leading rather than following the market as it seeks to be the ‘one stop shop’ for the homebuyer, the Amazon of UK residential, with services ranging across property to tradesmen to utilities. In our view, two catalysts are likely to lead to a material re-rating of Zoopla’s shares in the coming months: the continued decline of challenger portal, ‘On The Market’ (Zoopla has now had 12 consecutive months of agency customer growth) and the Capital Markets Day on 15 September 2016, which will lift the curtain on the future strategy of Zoopla and its recent acquisitions of uSwitch and PSG.
We continue to have very high conviction on Zoopla. In our view, the strategy is logical and commercial and it is working. Strong performance from uSwitch drives our upgrades today as we believe that Zoopla is entering a prolonged purple patch and we have yet to see the real benefits of PSG, which, in our view, will provide traditional agents significant firepower as the agency battlefield moves from the high street to the cloud.
