Tonight:
5°c
The only way is up for miners. That's according to Redburn Partners, which today accused investors in the sector of myopia.
The research house says that there remains “very material upside and little downside” for the industry: with China's appetite growing thanks to urbanisation and promising pipelines from some of the sector's big boys.
Redburn also believes that current fears that Chinese demand will suffer from fiscal tightening by Beijing have been overplayed. Analysts say that this will harm metal prices a lot less than it would have in the past.
They also believe that the current equity prices are factoring in a bear case, with minimal growth and a drop in prices — a scenario they believe to be unrealistic.
Redburn's leading pick is Anglo American, 30½p stronger at 2495½p. But it is also a buyer of industry titan Rio Tinto, 42p better at 3333p and its former suitor BHP Billiton, 16p stronger at 1963p. It is a fan of Xstrata too, which climbed 231.2p to 1119¼p after sealing a new labour agreement with the unions at its Sudbury site in Canada. Higher metal prices also boosted the stocks.
Shares in London rose for a third day thanks to strength in the heavyweight banks and miners.
The FTSE 100 added 10.51 points to 5293.82 despite a large dividend payout from AstraZeneca, off 94p at 2837p, putting a drag on the top flight.
The drugs maker was also hit by fears that it could release disappointing clinical trial results for its bowel cancer drug Recentin later this year.
Morgan Stanley reckons that Recentin is likely to come up short in a trial against Roche's Avastin.
Advertising giant WPP climbed 6½p to 591½p as the whisper in the markets was that results for Sir Martin Sorrell's company — due to be released next month — would come in at the top end of expectations.
The talk was sparked by bosses at media group News Corp saying last night that the advertising market was improving and raising their earnings outlook for the rest of the financial year.
But Standard Life was the best-performing blue chip, 7p higher at 206p, after the insurer beat City sales forecasts for last year.
Banks were also better as Bank of America Merrill Lynch gave the thumbs up to the sector.
The broker is a buyer of Barclays, up 8¼p at 298p, Royal Bank of Scotland, 0.2p better at 36.4p, as well as Lloyds Banking Group, which was 1.4p stronger at 55.6p.
On the mid-tier, Big Yellow added 4½p to 332½p after Goldman Sachs slapped a buy rating on the shares.
The City heavyweight says that the self-storage space operator will benefit from a pick-up in house sales and that occupancy levels are now past their worst. Over half of Big Yellow's customers are using the space when moving house.
Fund manager Evolution gained 1p to 123½p after confirming that Andrew Umbers, the chief executive of its securities business, has stepped down just days after a positive trading update.
Trader Talk
Private investor Paul Vial has increased his stake in venture management firm Angle plc from 3.07% to 4.1% over two weeks. He now owns 1.1 million shares worth an estimated £245,000. Angle specialises in commercialisation of technology and the development of technology-based industries. It operates predominantly on a fee-for-service basis in areas such as incubation, intellectual property commercialisation and innovation. Angle's share price nearly doubled during January after the company reported it had swung back into profit.
Drazen Jorgig, Citywire.co.uk
Tomorrow's Agenda
Expect a busy day. Highlights in company news will be GlaxoSmithKline probably announcing thousands more redundancies and Royal Dutch Shell reporting fourth-quarter profits down at about $2.9 billion (£1.8 billion) against $4.8 billion a year earlier. The Bank of England's monetary policy committee is expected to keep interest rates on hold and end the quantitative easing programme.
Portfolio
BUY: RM
Altium Securities has put a buy rating on educational software and services provider RM, which this week won a contract to supply Essex County Council under the Building Schools for the Future programme. Revenues from the deal could be £100 million-plus.
SELL: BP
Panmure Gordon remains unswayed by yesterday's BP numbers which saw shares fall. It notes BP's strong production — up 4.1% in the year — but says that figure will fall this year. “We believe shares are now up to speed with events. Sell,” says analyst Peter Hitchens.
HOLD: SEGRO AND LIBERTY
Deutsche Bank has cut its price targets on property groups Segro and Liberty and rated their shares a hold. Liberty falls from 535p to 505p and Segro from 405p to 350p. It also cut its valuations on British Land, Hammerson and Land Securities but kept them a buy.
