FTSE 100 Rises on Mining and Oil Gains Amid Rate Cut Signals

The FTSE 100 closed higher on March 15, 2024, buoyed by gains in mining and oil stocks. The index increased by 27.11 points, or 0.3%, finishing at 9,250.43 after dipping to 9,177.09 earlier in the day. Conversely, the FTSE 250 ended slightly lower, down 4.83 points at 21,690.52, while the AIM All-Share rose by 1.17 points to close at 782.42.

A notable rise in copper prices propelled mining companies such as Antofagasta, Anglo American, and Glencore to significant gains of 9.3%, 4.7%, and 3.0%, respectively. The price of copper increased by 2.7% to approximately $4.70 per pound, driven by the announcement from US competitor Freeport-McMoRan regarding the suspension of its Indonesian copper mine, which is expected to reduce metal output.

Market Reactions to Bank of England’s Comments

Comments from Bank of England Governor Andrew Bailey put pressure on the British pound, which fell to $1.3452 at the close of the London equity market, down from $1.3509 on the previous day. In an interview, Bailey indicated that there may be further reductions in interest rates, stating, “there is still some further journey down in rates,” although he added that the timing and extent of cuts would depend on inflation trends. He anticipates a slight rise in inflation in the upcoming report, but expects it to decrease thereafter. Bailey also noted a softening labor market, suggesting that job seekers may find it increasingly challenging to secure employment.

The euro also weakened against the dollar, finishing at $1.1740, down from $1.1792. In broader European markets, the Cac 40 index in Paris closed down 0.6%, while the Dax 40 in Frankfurt gained 0.2%. US markets exhibited slight declines, with the Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite each down by 0.1%. The yield on the US 10-year Treasury remained unchanged at 4.14%, while the 30-year Treasury yield held steady at 4.76%.

Oil Price Surge and Corporate Developments

Geopolitical tensions surrounding Russian oil prompted an increase in oil prices, with Brent crude rising to $68.94 per barrel, up from $67.98. This increase positively affected major oil companies, with BP and Shell seeing stock price increases of 1.5% and 1.1%, respectively.

In contrast, JD Sports Fashion experienced a decline of 0.7% following comments from CEO Regis Schultz, who described the current trading environment as “tough” due to strained consumer finances. Despite these challenges, Schultz expressed a cautious outlook for the second half of the financial year, anticipating limited impacts from US tariffs. Broker Shore Capital remains optimistic about JD Sports, citing strong brand loyalty and good margins as factors that could foster medium-term growth.

The biggest gainers on the FTSE 100 included Antofagasta, which rose by 224.00 pence to 2,642.00 pence, and Anglo American, up 120.00 pence to 2,671.00 pence. Other significant risers included Babcock International, Glencore, and BAE Systems. Conversely, key fallers included Ashtead Group, IMI, and Burberry.

Looking ahead, the global economic calendar for Thursday includes important data releases such as US GDP, durable goods orders, and weekly jobless claims figures, as well as a decision on interest rates in Switzerland. In the UK, corporate announcements will feature a trading statement from safety equipment firm Halma and media company STV.