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Monday, September 26, 2022
Stocks & Shares

FTSE 100 hits new high as BHP results boost mining stocks

mining stocks

Shares of BHP Group Ltd rose 4.2% after the world’s largest miner reported its strongest profit since 2011 on the back of gains in prices of coal and other commodities

UK’s blue-chip index hit a two-month high on Tuesday as bumper results from BHP Group lifted mining stocks, while fashion chain Ted Baker soared on a buyout deal.

Ted Baker surged 17.1% after Juicy Couture and Forever 21 owner Authentic Brands agreed to buy the company in a deal worth roughly 211 million pounds ($254.26 million).

London-listed shares of BHP Group Ltd rose 4.2% after the world’s largest miner reported its strongest profit since 2011 on the back of gains in prices of coal and other commodities. The wider mining index gained 2.8%.

The more domestically focussed FTSE 250 index remained little changed, while the sterling lost ground after data showed Britain’s super-hot labour market displayed signs of cooling.

The number of people in work expanded by 160,000 in the April-June from the quarter before, a lot less than economists’ forecast of 256,000 rise, as per a Reuters poll.

Data also showed earnings adjusted for consumer prices index fell 4.1%, the biggest drop since recording of wage data began in 2001.

Wage growth is fairly decent, but unfortunately inflation is pretty much wiping out all of it plus a little bit more, said Michael Hewson, chief market analyst at CMC Markets.

While you look at the U.S. economy and people are talking about peak inflation there, it’s unfortunately not going to be the same for Europe. You’re going to have divergences taking place between European, UK and U.S. inflation, given the fact that U.S. natural gas prices are a lot lower, he said.

The UK consumer prices data is due on Wednesday, with investors looking for cues on the Bank of England’s next move on interest rates. Money markets are currently pricing in an around 83% chance of a second consecutive 50 basis point hike from the BoE next month.

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