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Miners surge up to give Footsie a big push

The highlight of the morning so far has been a big gap up in the leading mining stocks after commodity prices saw a sharp recovery, and by mid-morning BHP Billiton, Antofagasta and Rio Tinto were all up over 5%.

There were also some impressive moves elsewhere, and a highlight was Logica which shot up 12% after it raised its full-year revenue growth forecast and reported a 31% jump in adjusted operating profits in H1. These sorts of occurrences are rare and this confirms the bullish trend here.

TUI Travel was also slightly ahead after it announced a 39% rise in underlying operating profit in Q3, and said it was confident that its expectations for 2008 and 2009 could be achieved. Like Thomas Cook yesterday, we do not doubt the management quality here but it could be a tough rise for consumer stocks for some months yet.

Elsewhere, British Land reported an underlying pre-tax profit of £74m for Q1, down from £76m a year ago, but an IFRS loss of £572m versus a £266m profit in 2007. It said that the portfolio valuation was down 5% this quarter, while nav dropped 10% to 1,212p a share, and it is hard to see these shares progressing short term. Bellway said it sold 6,556 home in the twelve months to July, 14% less than the year before. It added that it did not expect widespread land write downs, but the position was being monitored in light of market conditions. With reservations down by around 45% in H2, and a lower group order book for future sales, this looks another stock that could soon come under severe pressure again.
 

Head of Research at Blue Index, specialists in trading

14/08/2008

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