BHP Billiton Ltd. (BHP) gained 2 percent after La Tercera reported the world’s biggest mining company signed a 20-year contract with Chile’s GNL Mejillones. Lonmin Plc (LMI) added 3.5 percent after South African prosecutors suspended murder charges against workers striking at the company’s mine. Phoenix IT (PNX) Group Ltd. slumped the most since its 2004 listing after reporting accounting irregularities at its Servo unit.
The FTSE 100 Index advanced 0.5 percent to 5,739.68 at 11:16 a.m. in London, after dropping 1.1 percent last week. The gauge has still gained 9.1 percent since the 2012 low on June 1 as European Central Bank President Mario Draghi pledged to do all it takes to preserve the euro. The broader FTSE All-Share Index also added 0.5 percent today. Ireland’s ISEQ Index rose 0.4 percent.
“Investors appear to have convinced themselves that additional QE is now more likely from this month’s Fed meeting,” said Michael Hewson, a market analyst at CMC Markets U.K. Plc, referring to a third round of quantitative easing in the world’s largest economy. “Markets are speculating that President Draghi will announce a raft of measures to push yields lower on Spanish and Italian bonds this week.”
The volume of shares changing hands on the FTSE 100 Index was 32 percent lower than the average of the last 30 days, data compiled by Bloomberg show.
Euro-area nations are selling more than 20 billion euros ($25 billion) of debt to investors this week, amid speculation Draghi will outline details of a new bond-purchase program at the ECB’s regular policy meeting on Sept. 6.
Spain, France, Austria and Belgium return to the market after a month-long pause. Germany, the region’s largest economy, is also selling debt before the ECB’s meeting in Frankfurt.
In China, manufacturing unexpectedly contracted for the first time in nine months, a government survey on Sept. 1 showed. The Purchasing Managers Index fell to 49.2 in August from 50.1 in July, the National Bureau of Statistics and China Federation of Logistics and Purchasing said.
A gauge of manufacturing in the 17-nation euro area based on a survey of purchasing managers was revised lower to 45.1 from the reading of 45.3 estimated earlier, London-based Markit Economics said today. The index, which stood at 44 in July, has held below 50 for 13 months, indicating contraction.
BHP gained 2 percent to 1,873 pence. La Tercera said BHP’s agreement with the Chilean company will give it access to GNL’s natural gas terminal and define the capacity it will be able to use and the rate it will pay.
A gauge of mining shares listed on the FTSE 350 Index advanced 1.8 percent. Rio Tinto Group (RIO) and Anglo American Plc (AAL) climbed 2 percent to 2,791 pence, and 1.6 percent to 1,778.5 pence, respectively. Randgold Resources Ltd. (RRS) added 2.1 percent to 6,450 pence.
Lonmin, whose South African platinum mine was shut down last month after an illegal strike led to violent unrest, gained 3.5 percent to 593 pence. Mineworkers who were arrested on murder charges will be released from prison and the case postponed until a judicial commission of inquiry completes its work, Acting National Director of Prosecutions Nomgcobo Jiba told reporters in Pretoria yesterday.
Phoenix IT plummeted 34 percent to 138.5 pence, the most since the company listed in 2004, after saying net assets will be reduced by 14 million pounds ($22 million) after taxes, following accounting miss-statements at its Servo unit.
Admiral Group Plc (ADM) slipped 3.8 percent to 1,141 pence after Canaccord Genuity told investors to sell the shares. Credit Suisse AG cut its recommendations on Admiral’s shares to neutral, the equivalent of hold, from outperform.
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