London shares make steady gains in early trade on Friday, matching gains made on Wall Street and in Asia overnight. , with midcaps making similar advances, the FTSE 250 up 104 points at 17,108.
In corporate news, the decision by Glencore (GLEN) to scale back its zinc production has triggered a 6% rise in the metal price and given a spur to the mining sector. Supply cuts are needed in most commodities to counterbalance weak demand. Glencore jumps 6.3% to 128.2p on the news. Glencore is up 29% on the week.
Third quarter results from US aluminium producer Alcoa (AA.:NYSE), traditionally seen as the start of the US earnings season, kicks off a flurry of trading updates in the coming weeks with a big earnings miss. Earnings per share in the third quarter were 7 cents (4.6p) versus analyst expectations of 13 cents. Released after US markets closed yesterday evening, shares in Alcoa are trading 4.9% lower in after-hours trading.
But Alcoa's slip-up is not bothering investors this morning as London's week-long metals market rally extends into the weekend.
Fellow zinc producer Vedanta Resources (VED) takes top place on the FTSE leader board with a 9.4% to 580p, supported by cost saving news within the business. Iron ore producer Ferrexpo (FXPO) tags along for the ride, up 5.3% to 40p after appointing an advisor to help with debt negotiations. It may be forced to write off $174 million of cash held with Ukrainian bank F&C which has been shut down.
Botswana Diamonds (BOD:AIM) jumps 14.5% to 0.83p after securing a new prospecting licence in Botswana. We are not fans of the stock as it has yet to find anything worthwhile in many years of exploration, despite claims to the contrary by its management.
Iodine producer Iofina (IOF:AIM) gains 7% to 19p as it announces it is on track to deliver its production guidance for the second half. In the third quarter it produced 143.6 tonnes of iodine - up nearly 89% year-on-year - taking output in 2015 to date to 437.7 tonnes.
Oil services provider Petrofac (PFC) is up 8.9% to 934.5p as the market responds positively to the news it had canned a contract with Shanghai Zhenhua Industries Company to build a new offshore services vessel citing 'issues' with the latter's performance. Investec says: 'the likely cancellation of Petrofac's "big boat" would mark another strategic reversal, albeit not an unpopular one. It would bring the company full circle, back to its roots as an onshore, MENA-focussed E&C contractor.'
Beer and soft drinks giant SABMiller (SAB), which has rejected Anheuser-Busch InBev's (BUD:NYSE) £65 billion takeover offer, froths up another 4p to £36.45. CEO Alan Clark strengthens the case for remaining a standalone business by more than doubling SABMiller's annual cost savings target from US$500 million by 2018 to 'at least' $1.05 billion by 2020.