23rd Oct 2019 11:53
(Alliance News) - London stocks were higher on Wednesday as the pound wilted following the latest setback to UK Prime Minister Boris Johnson's ambition of leaving the EU before the end of the month.
In a busy day for mining production news, Antofagasta was among the top performers in the FTSE 100, with Centamin rising in the FTSE 250, following their respective output figures. Fresnillo, meanwhile, was sat at the bottom of the FTSE 100 after guiding to annual production towards the bottom of its forecast range.
Focus for the remainder of the day lies on US earnings, with big names such as Boeing, Microsoft and Caterpillar reporting.
The FTSE 100 stock index was 29.09 points higher, up 0.4%, at 7,241.58 Wednesday midday. The FTSE 250 was down 36.41 points, or 0.2%, at 20,145.50 and the AIM All-Share up 0.1% at 884.89.
The Cboe UK 100 index was up 0.4% at 12,282.81. The Cboe UK 250 was down 0.3% at 12,282.81 and the Cboe UK Small Companies flat at 11,155.70.
In mainland Europe, the CAC 40 in Paris was down 0.3% and the DAX 30 in Frankfurt up 0.3%.
"European markets are on the rise this morning, as a decline in the pound and euro helped boost sentiment despite the resurgence in Brexit fears after another failed Brexit vote last night," said Joshua Mahony, senior market analyst at IG. "Earnings performance in the US is likely to continue driving sentiment for the day ahead."
In the US, the Dow 30, S&P 500 and Nasdaq Composite are all pointed down 0.1% ahead of the Wall Street open.
Third-quarter earnings from payment services provider Paypal, aerospace firm Boeing, and industrial equipment maker Caterpillar are due on Wednesday, while Microsoft releases first-quarter results.
"Looking at earnings season thus far, we have seen a rather predictable trend of outperformance driven by low expectations rather than improved earnings. The pattern of stocks with lower earnings that beat market estimates is likely to continue as we move through earnings season," said IG's Mahony.
In the UK, Prime Minister Boris Johnson has vowed to push for an election if EU leaders sanction a Brexit extension of up to three months.
Johnson must now wait to hear from the heads of the EU27 after his plans to fast-track his Withdrawal Agreement Bill through the Commons before the Halloween deadline hit the buffers.
There was anger in Downing Street after MPs rejected Johnson's plan to push through the legislation approving his deal with the EU in just three days by 322 votes to 308 – despite having given their approval, in principle, to his Brexit deal only moments beforehand.
Johnson's decision to "pause" the legislation makes his promise to take Britain out of the EU by October 31 "come what may" difficult to fulfil and means Brexit could be delayed until next year, with a general election looming. The Labour Party looks as if it could be prepared to back an election before agitating for a second referendum – as long as an extension with Brussels is in place.
The pound was quoted at USD1.2855 at midday amid the latest Brexit drama, down sharply from USD1.2958 late Tuesday.
In London, Antofagasta was among the top blue-chip performers on the back of its production report.
For the third quarter of 2019, Antofagasta produced 197,000 tonnes of copper, 0.8% lower than the previous quarter. Year-to-date copper output was 584,200 tonnes, up 16% year-on-year due to higher throughput and grades.
The Chilean copper miner warned 2020 production is likely to fall year-on-year, though performance in the third quarter of 2019 was "strong". Antofagasta sees 2019 production between 750,000 tonnes and 790,000 tonnes of copper, which has been reiterated. However, for 2020, Antofagasta has guided for production to be between 725,000 tonnes and 790,000 tonne
In contrast, Mexican gold and silver miner Fresnillo was the worst performer in the FTSE 100, down 2.9%, as its quarterly output figures disappointed.
Third-quarter gold production came in at 209,752 ounces, 5.2% below the second quarter and 6.9% lower than the year before. Year-to-date gold production has declined by 7.0%.
Silver production was 13.3 million ounces for the quarter, 7.9% lower than the previous three months and 15% lower than the year before. Year-to-date output has slipped 12% to 40.8 million ounces.
Fresnillo has guided for 880,000 ounces to 910,000 ounces of gold for 2019, and for between 55 million ounces and 58 million ounces of silver. The company expects 2019 production to be towards the lower end of each range. In 2018, Fresnillo produced 923,000 ounces of gold and 61.8 million ounces of silver.
It was a better session for fellow gold miner Centamin, however, up 4.1% following its own production figures from Egypt.
Gold production in the third quarter of 2019 was 98,045 ounces, 17% lower than the second quarter and also 17% lower than a year before.
Centamin's gold sales were 108,826 ounces in the third quarter. This was 3% down on the second quarter, but 2% higher than a year prior, delivering USD160.8 million in revenue. For the first nine months of 2019, Centamin has produced 332,141 ounces of gold, 1% lower than a year before.
The company said the open pit at the Sukari mine has continued to improve grades, though mining rates at the higher-grade stage four west wall were slower than planned. Underground production exceeded targets, Centamin continued.
Absolute cash costs of production, and all-in sustaining costs, are both scheduled to be better than budget for both the third quarter and the first nine months of 2019, the miner said.
Elsewhere in the FTSE 250, Softcat was down 2.9% despite reporting a solid set of annual results.
The IT infrastructure provider reported revenue growth of 24% in the financial year ended July 31, to GBP991.8 million from GBP797.2 million the year before. Pretax profit rose by 25% to GBP84.8 million from GBP68.1 million, thanks to an increase in both customer numbers and average gross profit per customer.
Looking ahead, the company said it is "in great health" and strategically well-positioned. Softcat said it remains confident in its ability to gain market share and targets further growth during 2020. Trading in the first eleven weeks of the new financial year has been on track, Softcat added.
By Lucy Heming; [email protected]
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