FTSE edges higher but mining shares dip on disappointing Chinese data

Discussion in 'Market News' started by Lily, Aug 12, 2016.

  1. Lily

    Lily Forum Member

    Aug 29, 2015
    Likes Received:
    Leading index at new 14 month high as crude price rise lifts oil companies

    Leading shares are edging up to new 14 month highs but mining shares are on the slide after disappointing Chinese data.

    The country’s industrial production growth for July fell from 6.2% to 6%, while retail sales rose 10.2%, down from 10.6% in June.

    There’s growing optimism that the hawks at the Federal Reserve may soon be circling once again, as the combination of improved US economic data and steady oil prices project a more acceptable landscape for a rate hike. Not only is this bolstering the greenback, but it’s also taking a toll on gold, leaving Fresnillo and Randgold Resources languishing towards the foot of the index.

    We believe that shareholders should be encouraged that the new chief executive:

    However, this may imply a period of retrenchment while changes are made. We believe it is also encouraging that Mr McCue has led a business through a takeover, which may be in the medium-term future for Restaurant Group...

    However, we believe a period of share price consolidation may follow the appointment of the new CEO. We maintain our hold recommendation and increase our target price to 380p [from 270p].

    The first jury verdicts in the long-running two-way litigation between Genus’ ABS (bovine) and US-based Sexing Technologies (‘ST’), announced this week, have in our view been disappointing for Genus. It has been announced this morning that the Wisconsin jury concluded that two of ST’s patents were infringed by ABS, and that Genus had breached confidentiality agreements. This follows the verdict announced yesterday that although ST had engaged in anti-competitive practises in relation to sexed semen, Genus had not been able to prove that it suffered a loss as a result. We believe that damages are likely to be awarded against Genus. We move our cautious hold recommendation to sell, noting the strong share price performance in the run-up to today’s verdict.

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