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Today's markets: Blue chips fuelled by energy surge, Rio forecasts dip, ITM fundraise & more

Equities in London find favour
Today's markets: Blue chips fuelled by energy surge, Rio forecasts dip, ITM fundraise & more

 

  • FTSE100 hits post pandemic high
  • Rio Tinto production forecast cut
  • Fundraising for hydrogen tech company ITM

FTSE hits post-pandemic high

UK equities, and in particular the blue chip FTSE100, are in demand. A further rise this morning helped the FTSE100 reach its highest level since the pandemic struck in the spring of 2020, marking a sharp reversal in fortunes from a sell off in mid September. Booming energy and resources prices have helped to boost index heavyweights such as oil majors BP and Royal Dutch Shell as well as a host of resources giants while recent hints at interest rate rises have supported the banking sector with further momentum provided by strong corporate earnings reports from the US banking sector this week. 

But is it sustainable? Optimists are eyeing up all time highs for the FTSE100 which sit around the 7,700 level but that remains some way from today’s intra day high around 7,240. But energy input prices around the world are showing little sign of easing with news overnight that Chinese coal futures are likely to post their strongest week on record. 

Read Neil Wilson’s market report here. 

Read more: 

Green steel: future or fable?

Meanwhile, the mixed performance of the equity markets in the middle months of the year was reflected in a somewhat muted first quarter performance for financial services giant Hargreaves Lansdown (HL.). It added 23,000 new clients in the quarter to September and £1.3bn of new business while assets under administration edged up 2 per cent to £138bn. 

Read more: 

Margin pressure hits Hargreaves Lansdown

Rio Tinto down on production forecast drop

After thriving through the pandemic and various storms in the past two years, Rio Tinto (RIO) has now cut 2021 iron ore production guidance on the back of labour shortages in Western Australia. The major miner dropped its forecast from 325m-340m tonnes of iron ore to 320m-325m because of “modest delays” in bringing new production on. Australia still has a variety of lockdown restrictions, which differ by state. Western Australia is very restrictive and aims to keep Covid-19 cases at zero. 

The miner also reported a 9 per cent fall in copper production in the nine months to the end of September compared to the year before, although higher copper prices will more than make up for this decline. 

Rio was down 1.6 per cent in early trading on the news. 

Quickfire £250m raise for ITM Power

Hydrogen electrolyser company ITM Power (ITM) announced a £250m placing on Thursday afternoon to fund a major expansion programme. On Friday morning, ITM said the placing had been done at 400p, a 14 per cent discount to its previous closing price, sending its shares down 10 per cent to 429p. 

The company's technology is used to produce hydrogen gas from water and electricity, which can then be an energy store or used in industrial processes. This is the second major placing in the past year, after a £172m fundraise that closed in November 2020.

As of 31 July its cash and cash equivalents sat at £171m. 

Read the full news article here.