Miners drag FTSE lower as JD Sports soars to all-time high

The main market opened lower this morning as miners struggled but JD Sports was the bright spot, soaring after bumper earnings.

The FTSE 100 was dragged lower by mining stocks this morning, offsetting a jump in JD Sports (JD) as the sportswear retailer notched up record earnings.

The main index slipped 0.58%, or 40 points, to 7,027 after a tough night for US and Asian equities. Chinese property development giant Evergrande plunged as it struggled with its monster debt pile and investors looked ahead to US inflation data.

Online supermarket platform Ocado (OCDO) fell to the bottom of the blue chips, losing 2.9%, or 55p, to trade at £18.30. Its retail division, which is 50% owned by Marks & Spencer, reported a third-quarter revenue fall of 10.6% to £517m following the fire at its fulfilment centre in Erith, southeast London, over the summer.

International Consolidated Airlines (IAG) dropped 2.8%, or 4p, to trade at 144p as analysts at BNP Paribas downgraded the British Airways owner and reduced their target price.

Miners were down across the board: Anglo American (AAL) lost 2.4% to trade at £30.18, Glencore (GLEN) fell 2.2% to 332p, Rio Tinto (RIO) dropped 2.1% to £51.75, and BHP (BHP) shed 2% to change hands at £20.37.

AJ Bell investment director Russ Mould said: ‘If mining stocks are a bellwether for the global economy, then investors need to sit up and take notice that the sector has been one of the worst performers in the past month.’

The bright spot on the index was JD Sports, but despite soaring 7.3%, or 76p, to trade at an all-time high of £11.25, it wasn’t enough to keep the index in the black.

JD Sports is expecting a jump in profits this year after strong first-half results that saw revenues reach £3.8bn in the 26 weeks to the end of July, up from £2.5bn the previous year. Pre-tax profit soared to £439.5m from £61.9m last year.

Despite the exceptional results, Hargreaves Lansdown analyst Susannah Streeter said the group continues to withhold its dividend due to a shift in shopping behaviour, meaning low footfall in stores has continued, and the fact it is not immune to supply chain challenges.

The FTSE 250 ticked down 0.1%, or 22 points, to 23,752, with miners also dragging the mid-caps lower. Ferrexpo (FXPO) shed 4.5%, or 17p, to trade at 362p after Barclays cut its target price, while Petropavlovsk (POG) was down 2.4% at 19p.

Montanaro European splits

In investment trust news, Montanaro European Smaller Companies (MTE ), a top-performer managed by George Cooke, undertook a 10-for-one share split that made its shares look like they had plunged 90% on some share dealing websites, when, in fact, they had not.

Reflecting the falls in mining stocks, Baker Steel Resources (BSRT ) slipped 2% or 1.8p to 82.25p from a 12% discount at last night’s close. 

Marble Point Loan Financing (MPLF ) dropped 2.3% to 64 US cents as its board began to plan for a continuation vote at the end of next year that could see the dollar-denominated debt fund wind up if its market value remains below $400m (£289m). The £97m investment company reported it had achieved a 13.4% investment return in the first half from its portfolio of high-yielding, highly leveraged corporate loans.

Aberdeen Smaller Companies Income (ASCI ) gained 4.5p or 1.2% to 403.5p after returning 20.1% for the first six months of the year, beating the 17.4% gain of its stock market benchmark Fund manager Abby Glennie said the ‘recovery rally phase has been sharp but short term’.

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