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Miners prop up FTSE as 'Trump trade' gathers strength

Miners hit two-year highs as copper price jumps, with US president Donald Trump's plans continuing to lead investors to 'cyclicals'.

 
Miners prop up FTSE as 'Trump trade' gathers strength

Miners have jumped to the top of the FTSE 100, hitting two-year highs as the 'Trump trade' gathered strength, with investors favouring cyclical areas of the market on hopes the US president will bolster economic growth.

The UK blue-chip index edged just five points higher to 7,263, as areas of the market more sensitive to economic growth, such as miners and industrials, rallied at the expense of 'safer' sectors like utilities.

Miners dominated the FTSE 100 leaderboard, with Europe's basic resources index reaching its highest level since August 2014, as the copper price reached a 20-month high. Risers included:

  • Glencore (GLEN) +2.3% at 328p;
  • Anglo American (AAL) +2.2% at £13.82;
  • BHP Billiton (BLT) +2.1% at £13.99;
  • Antofagasta (ANTO) +1.8% at 881.5p;
  • Rio Tinto (RIO) +1.1% at £36.14.

US president Donald Trump's claim last week that he was set to unveil radical tax plans continued to buoy investors, while a lack of protectionist rhetoric his weekend summit with Japanese president Shinzo Abe reassured markets.

'The US president has shown further signs of conformity with US foreign policy during his weekend summit with Japan's prime minister Abe,' said analysts at Rabobank.

'Several commentators are expressing cautious optimism that the new president may not after all depart too far from the tone of previous administrations.'

Kathleen Brooks, research director at City Index, pointed to a slump in the VIX, the 'fear index' which measures volatility on the S&P 500, to sustained low levels showed US investors were still optimistic about Trump's policies.

'This is another sign that, for now, the Trump trade is still on,' she said. 'It also suggests that even with the controversy Trump has caused since he took office, financial markets are still willing to give him the benefit of the doubt,' she said.

The FTSE 250 also rose, up 30 points, or 0.2%, hitting a new record high of 18.745. Fidessa (FDSA) was among the risers, up 4.3% at £24.90 as the financial software group reported a 25% jump in full-year profits.

Among 'small cap' stocks, Sepura (SEPU) was a big faller, down 7.9% at 17.5p as the communications technology business said German competition authorities were likely to investigate its takeover by Chinese group Hytera.

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Citywire ratings: small cap stars rise up the ranks

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