Glencore leads London higher

In mid-morning trading the FTSE 100 has moved 40 points higher, beginning the new week on a stronger note.

Mining trucks at work
Source: Bloomberg

September has got off to a fitful start, as various holidays around the globe have meant that it has been hard to get an overall impression of sentiment in recent days. China got back into action today, but with US markets off for Labor Day European indices look set for an afternoon of drift today. Nonetheless, sentiment recovered from Friday’s poor finish, as investors start to look at Friday’s US job numbers in a more optimistic light. However, we have still to see a strong and sustained rally develop across risk assets, and with China data due later in the week many will be keeping their powder dry.

Battered commodities titan Glencore surged on the open this morning after it announced plans to start plugging the debt hole in its accounts. In addition, it is cutting back on production by closing some African operations and also cutting the dividend. Given how crowded this short trade has been, it is not surprising to see such a bounce in the shares, but it will be interesting to see whether this is more than just a flash in the pan.

Associated British Foods has taken a small knock today after it issued a profit warning, as its sugar division continues to feel the pain. Primark’s US expansion has helped keep the conglomerate on an even keel, but even here the signs are not as encouraging  as they once were, and the news will reignite speculation over the wisdom of retaining two such contrasting businesses under the one roof.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.