FTSE 100 steadies Anglo American, Glencore, Rio Tinto shares fly

The FTSE 100 index has staged a strong recovery this month as the corporate earnings season takes shape. The index soared to £7,640, the highest level since June 16th. It has jumped by more than 5.80% from the lowest level this month.

Mining stocks lead

The FTSE 100 index did well on Thursday as mining stocks led. Anglo American share price jumped by over 5% after the company published strong results. Its copper production jumped by 42% in the first half, helping it offset a sharp decline in prices. The company’s stock has also recovered after its De Beers business reached a deal with Botswana.

Antofagasta share price rose by 3.26% even after the company lowered its copper guidance for the second part of the year. As we wrote here, it expects to produce between 640k and 670k tons because of construction delays and water shortage.

Glencore and Rio Tinto shares also jumped by more than 3% as investors reacted to the robust earnings by BHP. The Australian mining giant reported record iron ore and copper output as demand remained at an elevated level. Iron ore output jumped to 65.3 million tons in the fiscal Q4. Its copper output jumped to over 1.72 million tons.

Still, mining companies are contending with falling demand as industrial output in key countries fall. Data published this week showed that America’s manufacturing and industrial production dropped in June. 

Similarly, as I reported here, China’s industrial production and fixed asset investments rose at a slower pace than expected in Q2. Some European countries, including Germany, have moved into a shallow recession.

The top fallers in the FTSE 100 index were Scottish Mortgage Investment Trust, Flutter Entertainment, Diageo, Entertain, and IAG.

FTSE 100 index forecast

FTSE chart by TradingView

The FTSE 100 index started its recovery path on July 10th when it formed two morning star patterns on the daily chart. The lower parts of these stars was at £7,220, which coincided with the lowest point on March 20th.

Since then, the index has crossed the 25-day and 50-day moving averages, signaling that bulls are gaining control. The index is also in the process of forming a three white soldiers pattern, which is usually a bullish sign.

Therefore, there is a possibility that the index will continue rising as buyers target the next key resistance at £7,800.