Miners were leading the charge for the second session in a row as the FTSE 100 continued to stabilise after last week’s heavy rout.
Anglo American headed the pack. Its South African subsidiary Kumba Iron Ore notched up a strong financial performance last year, with revenue and profit both increasing, thanks largely to iron ore export prices increasing to $71 per tonne.
The news came as welcome relief for Anglo investors who are increasingly fearful about the political climate in South Africa. The nation’s ruling ANC party has formally asked president Jacob Zuma to resign so that new leader Cyril Ramaphosa can take over.
Yuen Low at Shore Capital explains: “We suspect that Zuma will continue to resist tooth-and-nail any pressure on him to step down. We see the prospect of a Ramaphosa presidency as a positive. Hopefully he will make significant in-roads in overturning controversial amendments to South Africa’s Mining Charter.”
Investors put aside political concerns this session and shares rose 23.2p to 1665.6p. Rival BHP Billiton was also climbing up the table despite a $1.8 billion (£1.3 billion) hit this year from the tax reform package in the US.
The Anglo-Australian miner said it will be dented by $898 million of deferred taxes and a further $834 million non-cash impairment of foreign tax credits.
But in the long run, lower corporate tax in the US will benefit profits, it added. The corporate tax rate has been cut to 21% from 35% under President Donald Trump’s tax overhaul, which was approved by the House of Representatives in December.
BHP Billiton shares were up 6.2p at 1511.2p but overall the FTSE 100 gained just 2.7 points to 7179.83.
On AIM, Ebiquity announced plans to sell its advertising intelligence business to Nielsen for £26 million.
The deal gives Ebiquity the firepower to invest in proprietary technology and data analytics capabilities across the remainder of its business.
Along with the disposal, Ebiquity said revenue performance in the US was below expectations and shares fell 0.5p to 100p.
But one firm making gains on AIM was software company Intercede.
The firm said it had been awarded a contract by a Middle Eastern country worth more than £1 million.
Using Intercede technology, citizens with an existing national identity card will be able to generate a new government digital identity on their smartphone via a government app.
The identity can then be used for gaining access to government services such as healthcare, banking and e-commerce. Shares were up 2p at 29p.