Glencore leads miners higher but housebuilders fall again

Discussion in 'Market News' started by Lily, Nov 4, 2015.

  1. Lily

    Lily Forum Member

    Aug 29, 2015
    Likes Received:
    Builders down despite upbeat comments from Persimmon

    A rise in mining shares has outweighed another slump in housebuilders, helping lift the UK market higher.

    Glencore, which has been volatile in recent months to say the least, has climbed 7p to 126.45p after the group said it was on track to cut its debt from $30bn to $20bn by the end of 2016. It plans to make further cuts to its copper output amid falling metal prices, reducing production by 455,000 tonnes by the end of 2017.

    We will need to review today’s releases in detail, but we expect that the disposal will please the market, and on the presumption that the reduced production across a number of commodities is a function of adjusting to costs (rather than production problems) this will also be welcomed. Overall today’s releases should be treated positively by the market.

    Miners are very much leading the charge for London in the day’s early trading, with Glencore at the top of the FTSE-100 off the back of this morning’s update, whilst the sector as a whole found cheer off the back of what are being seen as supportive comments from China. The president has made ‘economy-friendly’ comments, along with proposals for financial market reform, which is again certainly helping add to the general feel-good factor.

    The sell recommendation rests on a view that gross margins are likely to come off in future as the FPC plays a part in moderating house price inflation, on which Persimmon says “will support a more stable and sustainable outlook for the housing market”.

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