Sector movers: Miners shine on weak pound, TalkTalk drags telecoms lower
A strengthening of the dollar and higher copper prices saw mining stocks lead the sectors in afternoon trading on Monday.
Any weakening in sterling tends to underpin the top-flight index as around 70% of its constituents derive most of their earnings from overseas.
A strong performance from the heavily-weighted mining sector also lent a hand as copper prices advanced, helping to push shares in Glencore, Rio Tinto, Antofagasta and Anglo American higher, even though usual effect of a stronger dollar is to push down commodities prices.
Anglo American also got a lift after rose after announcing the sale of the New Largo thermal coal project and Old New Largo closed colliery in South Africa for ZAR 850m ($71m).
On the downside, TalkTalk led the fixed line players lower as Societe Generale cut its price target on the stock to 125p from 150p.
"The top line may take time to stabilise, while slowing savings and increased cash costs drag our EBITDA and cash flow well below consensus. A lack of owned access network leaves gross margin open to pressure, is expensive and slow to solve, and may deter potential buyers," the bank said.
Diageo was the catalyst for declines in beverages, having dropped after a downgrade to ‘sector perform’ at RBC Capital Markets.
Top performing sectors so far today
Mining 19,495.91 +1.90%
Industrial Metals & Mining 4,263.45 +1.30%
Electricity 7,627.73 +1.22%
Aerospace and Defence 4,997.66 +1.02%
Forestry & Paper 20,616.38 +1.00%
Bottom performing sectors so far today
Oil Equipment, Services & Distribution 13,328.85 -1.72%
Real Estate Investment & Services 2,915.34 -1.57%
Fixed Line Telecommunications 2,996.30 -1.12%
Beverages 20,297.77 -1.08%
Tobacco 52,364.36 -1.04%