FTSE flat as mining shares weigh but Primark owner ABF jumps 2%

Discussion in 'Market News' started by Lily, Aug 30, 2016.

  1. Lily

    Lily Forum Member

    Aug 29, 2015
    Likes Received:
    Broker note boosts ABF but miners hit by continuing dollar strength

    Leading shares are struggling for direction after the long Bank Holiday weekend, but Primark owner Associated British Foods is striding higher.

    The company is up 64p or more than 2% at £30.14 following a positive note from analysts at RBC, who moved their recommendation from sector perform to outperform and raised their target price from £28 to £34.

    Holding back the [mining] sector are two drivers. The first is technicals after major breakdowns in the prices of key raw materials iron and copper, both barometers of global growth. The second is a stronger US dollar (3-week highs and still rising) which makes the latter more expensive. This is a product of Fed Chair Janet Yellen’s Jackson Hole speech last Friday, one which saw her accomplish the difficult task of offering something for both the doves and hawks on monetary policy watch. The fact that US markets closed only marginally lower on Friday and posted gains last night suggests an absence of panic about another rate rise. Markets appear to be increasingly coming round to the prospect of another US rate hike this year.

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