FTSE ends day trading in positive territory as miners recover

The FTSE 100 traded up 0.97% at 7,264.43 just before the close Tuesday as mining companies recovered from Monday’s sharp declines triggered by the latest set of US sanctions against Russia. 

The London market’s rally sped up once the US markets opened and the Dow Jones Industrial Average jumped 400 points boosted by a speech by China’s president Xi Jinping, a speech which was surprisingly conciliatory and didn’t offer any tit-for-tat measure in response to the US tariffs on China’s imports. 

Instead, Xi spoke of increased cooperation with foreign financial markets and broadening market access to China’s banking, securities and insurance sectors.

All of the FTSE 100 day’s top gainers were big mining companies. Evraz, En+ and Polymetal lost over 20% at one point on Monday after the US introduced a set of punitive measures on a number of Russia’s oligarchs and major companies. 

However by Tuesday South African gold miner Anglo American led the way higher, rising 4.76%, followed by Rio Tinto, up 3.31% and BHP Billiton, up 2.94%. Metals trading house Glencore also rose 2.83% but the company’s shares are likely to remain under pressure as long as Russian sanctions are in place. 

Glencore is a large buyer of Russian aluminium and a major stakeholder in the country’s biggest aluminium producer Rusal.

The apparent easing of tensions between China and the US, the world’s two largest oil consumers, helped boost oil prices. Brent crude rallied 2.56% to trade at $70.40 a barrel while WTI gained 2.59% to $65.02/bbl. 

The pound was 0.33% stronger against the dollar at $1.4177 and nearly unchanged against the euro at €1.1472.

Gas and electricity price increase hits utilities

British Gas said Tuesday it will raise gas and electricity prices by an average 5.5% from the end of May arguing that this was because of higher wholesale and policy costs. 

The decision prompted share declines in all major utilities with British Gas’ parent company Centrica trading down 1.36%, National Grid 1.58% lower and United Utilities down 3.14%.

BRC data show higher March retail sales

UK retail sales increased 1.4% year on year in March, up from 0.6% in February and beating the consensus expectation of a drop of 0.1%, according to a report by the British Retail Consortium. 

In contrast, Barclays reported that consumer spending growth slowed to 2% in the same month, down from 3.8% in February and below the three-month average of 3.2%. 

Sales in March were higher because of an early Easter this year while February sales suffered due to a cold and snowy spell. Tesco traded 1.99% higher ahead of the release of its results Wednesday but Marks & Spencer lost 1.38% on the news. Barclays data also hit pub operators Mitchells & Butlers and JD Weatherspoon.

Tesco results and industrial production data to dominate on Wednesday

On the economic calendar for Wednesday is the release of UK balance of trade, industrial and manufacturing data while Tesco, the UK’s biggest retailer, is due to report full year results. 

The company is expected to show a sharp increase in pre-tax profits to around £1.2 billion as it defies the overall declining trend of high-street sales. Tesco is also due to shed some light on its plans for the recently acquired wholesale company Booker.