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London open: Equities rise on rally in mining and oil stocks
UK equities rose on Monday, lifted by a rally in mining and oil stocks as crude and copper prices jumped.
Anglo American, Rio Tinto and BHP Billiton were the top risers on the FTSE 100 in morning trade as copper prices increased 1.18% to $213.80 per pound on the Comex.
Oil producers BP, Royal Dutch Shell and Tullow Oil were also in the black as Brent crude climbed 1.15% to $50.22 per barrel and West Texas Intermediate moved up 1.17% to $49.20 per barrel.
A weaker dollar gave oil prices a boost as it may support demand in the rest of the world since it makes crude imports traded in the currency cheaper.
Going the other way, housebuilders were the biggest fallers after new Brexit polls showed more people want to leave the European Union ahead of Britain’s referendum on 23 June. Berkeley Group, Persimmon, Barratt Developments and Taylor Wimpey slumped.
A YouGov poll found 45% in the UK wanted to leave the EU, while 41% were in favour of staying. An Observer/Opinium poll also found the Leave campaign ahead by 43% to 40%.
Sterling dropped more than 1.5 cents to $1.4358, a three-year low against the dollar.
Craig Erlam, senior market analyst at Oanda, said “the polls are likely to make people rather uneasy and we can see that quite clearly today in the pound, currently down almost 1% against the dollar, having hit three week lows earlier in the session.
“With both sides likely to step up their game over the next couple of weeks, I imagine we’ll see a lot more volatility in the pound and the closer the polls get, or if ‘Vote Leave’ continues to push ahead, the pound may find itself back towards April’s lows before too long.”
In company news, Wolseley shares fell after JPMorgan Cazenove downgraded the stock to ‘neutral’ from ‘overweight’ and cut the price target to 4,100p from 4,300p on valuation grounds.
EasyJet dipped after saying its load factor fell 0.1 percentage points to 91.5% in May after cancellations due to French air traffic control strikes and weather conditions.
PZ Cussons gained after the Imperial Leather maker appointed Caroline Silver as non-executive chair effective from 1 January 2017 following the retirement of Richard Harvey.
Vodafone edged higher after the company and Africa’s 4G telecommunications operator Afrimax Group formed a non-equity partnership in Zambia.
