BRITAIN’S top share index rose yesterday, led into positive territory by Glencore after the mining and commodities trading firm announced a plan to cut billions of dollars in debt in the face of weakening metals prices.
The FTSE 100 was up 31.60 points, or 0.5 per cent, at 6,074.52 points at the close, rallying after a 2.4 per cent fall on Friday.
Glencore rose seven per cent after it said it will suspend dividends, sell assets and raise $2.5bn (£1.65bn) in a new share issue as it aims to cut its debt by a third to $20bn by the end of next year.
It also plans to shut down loss-making mines to help reduce a glut of supply that has weighed on prices.
Glencore’s share price has suffered, hitting an all-time low in the previous session, as the price of copper and coal has slid to more than six-year lows, but brokers welcomed the move to cut debt and production.
“There has been plenty of broker support for Glencore today, so generally miners are… probably in a slightly better place unless the market takes another tumble,” said Zeg Choudhry, managing director of Lontrad.
Glencore was upgraded to “neutral” from “underperform” by Bank of America Merill Lynch following the miner’s announcement.
Other miners also rallied, with Antofagasta up 7.5 per cent and Anglo American up 1.4 per cent.
In all, the mining sector rose 2.1 per cent, with the price of copper supported as China’s top state planner said that some key economic indicators were improving.
Publisher Pearson – which sold the Financial Times to Japan’s Nikkei in July for £844m – was up three per cent after two brokerages upgraded the stock, making it the top gainer on the E300 media index.
The FTSE’s top faller was Standard Chartered, down 1.7 per cent, trading at six-year lows after the Sunday Times reported over the weekend that the bank could be the focus of new Iran sanctions busting-related fines.
Associated British Foods, the company behind budget retailer Primark, dropped 0.8 per cent after a corporate update.
Although it maintained its full-year earnings forecast yesterday, as progress at Primark helped to offset declines in its sugar unit, it said the strengthening pound would hit its results by more than previously expected.