Mining stocks are giving equity markets the world over a leg up this morning, as investors await earnings this week from three mining giants -- BHP Billton Ltd. , Rio Tinto Plc and Xstrata.
The heavyweight STOXX Europe 600 Basic Resources index was up 1.5 percent, with a broad uptick in both base and precious metals prices supporting stocks across the board.
African-focused Randgold Resourcesposted a 43 per cent rise in full-year profit earlier today and announced plans to increase its dividend by 18 percent, after gold price gains more than offset a fall in production.
Elsewhere in the sector, Xstrata gained 2.6 percent ahead of its results on Tuesday, buoyed by positive broker comment from Citigroup and Nomura, while the restart of a copper smelter in Australia added further support.
In the same vein, Canaccord Genuity upgraded its price targets for both BHP and Rio Tinto.
"They are both generating massive cash flows - in the case of Rio Tinto, just over $11-billion (U.S.) of operating cash flow for the 12 months to December, while we estimate BHP Billiton will have generated $23.4-billion," wrote analysts Damien Hackett and Jeremy Dibb.
"We suggest both companies will prove to be a generous source of extraordinary dividends back to shareholders over the next few years."
Oil rose, while the euro fell to a two-week low against the dollar after a bigger than expected fall in German industrial orders.
World equities as measured by the MSCI All-Country World Index advanced 0.2 percent after gaining 2.2 percent last week. The index is up 3.4 percent so far this year, while MSCI emerging markets index is down 2 percent.
U.S. stock index futures put on 0.3 percent, indicating a firm open on Wall Street. The pan-European FTSEurofirst 300 rose 0.9 percent, while Germany’s DAX added 0.9 percent, shrugging off the news that German industrial orders fell by 3.4 percent on the month in December. Japan’s Nikkei average put on 0.5 percent, hitting a nine-month high.
Yields on benchmark 10-year Treasuries rose 3 basis points to 3.6701 percent, their highest level since early May and up about 28 basis points since the start of the month.
Copper gained 1 percent to $10,152.75 a tonne after hitting a record high of $10,153.50. (The figures you see on Globe Investor are the Comex prices, in cents per pound.)
- BHP Billiton Ltd$27.66+0.03(+0.11%)
- Rio Tinto PLC$30.50-0.05(-0.16%)
- Randgold Resources Ltd$84.73-0.56(-0.66%)
- Gold Front Month Futures$1.28K+5.90(+0.46%)
- Crude Oil Front Month Futures$44.12-0.20(-0.45%)
- Copper High Grade Front Month Futures$2.150.00(-0.05%)
- Updated May 4 10:59 PM CDT. Delayed by at least 15 minutes.