Tuesday 29 September 2015 4:56 pm

Glencore share price rebounds in late trading - after it plunges 30 per cent in Hong Kong

Shares in embattled commodities miner and trader Glencore closed up 17 per cent to 80.25p per share today after extending gains just before the close.

Glencore shares soared around 19 per cent to 81.53p this afternoon, following an assurance from the company that it's "financially and operationally robust".

Earlier today Nigel Wilson, chief executive of Legal & General, told the BBC that the company's lack of signalling was causing a "huge amount of uncertainty" and having a "massive contagion effect across the world".

Shares in Glencore had initially popped at the open – after taking a hammering on both the London and Hong Kong stock markets yesterday – rebounding more than nine per cent in late-morning trading, rising to 74.85p.

Read more: City confidence in Glencore has evaporated

More than £2bn was wiped off the company's value yesterday after a note from analysts at Investec questioned how much the company's shares would be worth if the price of metals fails to rise. Shares closed 29 per cent down in London, at 72p. 

Overnight it took a battering in Asia, with its Hong Kong-listed shares plunging by just short of 30 per cent, to 8.65 Hong Kong dollars. 

Brenda Kelly, head analyst at London Capital Group, pointed out that Glencore's rebound comes "off a very low base".

But she also noted copper prices – a fall in which brought about the fall in Glencore's shares – "do appear to be stabilising a little".

"From a technical perspective, copper is not oversold but looks to be displaying a degree of bullish divergence which could be a precursor to a near term bounce in the metal. Given that the price has declined over 10% in the past 12 days, a squeeze higher cannot be ruled out from here. The question is whether it will come in time or indeed in enough substance to allay Glencore’s demise. Yesterday’s move was doubtless overdone on absolutely no news."

Read more: What went wrong? A timeline of Glencore's share price crisis

However, she added that the crisis in commodities markets will continue to weigh on the company.

"Cutting debt and selling assets is one thing but unless the commodity story is heading towards a happier ending, investors will continue to punish the share price and only serve to make any management actions futile."

"There is clearly a sustained and ferocious attack on its equity and it’s unclear whether this is a genuine view that the company is not going to be around in six months," added Chris Weston, chief market strategist at IG.

"However, a simple look at some of the more liquid debt issuance shows fixed income investors see Glencore as a high yield play and not investment grade. The cost to protect against bond default (Credit Default Swaps or CDS) is skyrocketing and, in turn, this is hurting the equity – all leading to the perception we are going to see counterparty risk increase and forced selling from the Glencore trading desk. There is a growing feedback loop between Glencore and the broader commodity trade."