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London open: Stocks gain as metal prices boost mining shares
UK equities were given a boost by mining shares on Monday morning as metal prices edged higher.
Glencore and Anglo American were among the top risers on the FTSE 100 after gold, silver, copper and platinum prices rose.
In contrast, oil continued to slide with Brent crude down 2.1% to $36.10 per barrel and West Texas Intermediate down 1.2% to $35.62 per barrel at 0853 GMT.
FXTM research analyst Lukman Otunuga said oil prices may remain vulnerable after Iraq’s oil Minister Adel Abdul-Mahdi reiterated that OPEC will stick to its decision of maintaining a policy of uncapped production levels.
“It remains clear that OPEC’s decision to leave production unchanged is motivated by the hope of regaining market share and pushing away other competitors from the market,” Otunuga said.
“With any expectations of an immediate production cut discounted, WTI Oil remains fundamentally bearish and this should encourage sellers to attack.”
Meanwhile, Spain faces political uncertainty after anti-austerity party Podemos and liberal Ciudadanos made big gains as the conservative Popular Party (PP) lost its majority.
Sunday’s vote sees prime minister Mariano Rajoy’ People’s Party ostensibly still in power, but with 123 seats away from a majority.
“It’s like the Greek election saga in a minor key, one that poses a host of new problems for a country that has spent the last few months gradually sinking to the bottom of the Eurozone’s unofficial performance chart,” said Connor Campbell, financial analyst at Spreadex.
On the company front, Meggitt gained after completing the $340m (£228m) acquisition of the composites division of EDAC after receiving the customary US regulatory approvals.
BG and Shell climbed on news it will seek High Court approval on Monday to hold shareholder meetings over their £55bn merger following satisfaction of the final pre-condition to the recommended combination and with the unanimous approval of both boards.
Dairy Crest rose as it took full ownership of its galacto-oligosaccharide business on Monday.
Hammerson advanced as it agreed to sell Newcastle-upon-Tyne’s Monument Mall to the Standard Life Investments UK Property Fund for £75m.
