Market Report: US interest rates hold sends oil and metal stocks soaring
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Your support makes all the difference.The Federal Reserve chief Janet Yellen gave the FTSE 100’s beleaguered commodity sector something to cheer about as a decision to keep US interest rates on hold weakened the dollar and sent oil and metal stocks soaring.
Miners rallied by nearly 10 per cent after the Fed decision triggered a stampede of investors out of the dollar, with Glencore gaining 13.7p to 158p, Antofagasta 41.1p to 537.5p, BHP Billiton 58.6p to 822p and Rio Tinto putting on 104.5p to 2,034p.
The US dollar index, which measures the greenback against a basket of currencies, fell to its lowest level since October after the Fed signalled on Wednesday night that rates would rise at a slower pace than previously forecast.
Against the pound, the dollar was on track for its worst day since 2009, with sterling rising 1.7 per cent to $1.4494. The dollar’s fall helped crude oil and metals, which are priced in dollars and therefore became cheaper due to the weakening US currency.
The FTSE mining index rose 6.3 per cent but the overall FTSE 100 ended flat, up 25.63 or 0.4 per cent at 6,201.12 as a number of big stocks, such as British American Tobacco and developer Hammerson went ex-dividend.
Anglo American, up 48.2p at 540.8p, was given an extra boost by the approval of South African regulators for the sale of a Rustenburg platinum mine sale to Sibanye Gold.
Traders were also digesting George Osborne’s Budget, sending AG Barr, the maker of Irn Bru, down 29.5p to 511p due to the introduction of a tax on sugary drinks.
Elsewhere, Next fell 95p to 6,625p after a research note from Haitong Research concluded that the good times were over for its credit-driven Next Directory business.
At the smaller end of the commodities sector, the fortunes of Yorkshire potash group Sirius Minerals and London-based oil company EnQuest diverged. Sirius crashed 28.5 per cent or 6.5p to 16.5p, after it said the cost of a fertiliser mine in North Yorkshire could rise to £3.7bn, while EnQuest rose 31 per cent or 4.5p to 19p after it revealed that production jumped by more than a third last year.
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