FTSE 100 Rises on Mining Gains and Strong Corporate Earnings

The FTSE 100 opened on a positive note on Wednesday, rising by 38 points or 0.40% to reach 9,696.74. This upward momentum was driven by strong performances in the mining sector, encouraging results from companies such as GSK and Next, and an increase in copper prices.

Mining Sector Boosted by Record Copper Prices

Mining stocks significantly contributed to the FTSE 100’s gains as copper prices soared to an all-time high of over $11,140 per tonne. This surge was largely attributed to global supply disruptions, particularly production challenges at Freeport-McMoRan’s Grasberg mine in Indonesia, coupled with a reduction in output guidance from Anglo American.

Shares of Glencore experienced a notable increase of 5.9%, reaching £372.20. Other prominent gains included Fresnillo, which rose by 2.9% to £2,212, and Anglo American, which climbed nearly 1.94% to £2,947. Endeavour Mining also saw a rise of 2.09%, reaching £3,128. In contrast, Diploma led the decline among stocks, falling 1.69%, followed by Ashtead Group down 1.13%.

Strong Corporate Earnings from GSK and Next

The retail sector received a boost as Next surged over 6.23% to £14,240. The clothing retailer raised its full-year profit guidance following a better-than-expected third-quarter performance. Sales for the 13 weeks ending October 25, 2023 rose by 10.5% year-on-year, significantly surpassing the initial forecast of 4.5%. Notably, UK sales increased by 5.4%, driven by improved stock levels, leading Next to announce plans for returning surplus cash to shareholders.

Meanwhile, GSK also reported strong results, with shares jumping 4.02% to £1,710. The pharmaceutical company exceeded expectations with a 7% rise in third-quarter revenue to £8.55 billion, surpassing the estimated £8.28 billion. Adjusted earnings per share reached £55, above the market expectation of £47. Following these results, GSK revised its full-year turnover growth forecast to 6-7%, up from the previous estimate of 3-5%.

In the financial sector, Swiss lender UBS reported a remarkable 74% increase in third-quarter net profit, reaching $2.5 billion. This performance surpassed forecasts and included $668 million in releases from litigation reserves linked to legacy Credit Suisse legal matters. UBS indicated that it has successfully achieved $10 billion of its targeted $13 billion in cost savings, with over two-thirds of Swiss client accounts migrated following the acquisition of Credit Suisse.

Overall, investor sentiment remained optimistic, influenced by global market trends. Japan’s Nikkei 225 rose 1.16%, bolstered by a rally in tech stocks. On Wall Street, stocks closed higher, fueled by renewed hopes for a US-China trade deal, with the Dow Jones up 0.3%, the S&P 500 gaining 0.2%, and the Nasdaq rising by 0.9%.