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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  Anglo American    AAL   GB00B1XZS820

ANGLO AMERICAN (AAL)
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FTSE hits bump on sterling jump after Bank of England rate hike signal

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09/14/2017 | 06:26pm CEST
People stand and sit outside the London Stock Exchange in Paternoster Square, London

LONDON (Reuters) - Britain's top share index dropped to a four-month low on Thursday as sterling surged after the Bank of England signalled that it was likely to raise rates in the coming months, weighing on the FTSE 100's predominantly dollar-earning constituents.

The FTSE 100 <.FTSE> ended the session 1.1 percent lower at 7,295.39 points, underperforming the broader European market which closed in positive territory.

The Bank of England's policymakers voted to keep rates on hold at a record-low 0.25 percent, and said that the central bank was likely to raise interest rates in the coming months if the economy and price pressures keep growing.

Sterling jumped more than 1 percent, putting pressure on big, international firms such as British American Tobacco (>> British American Tobacco) and Diageo (>> Diageo) which source a large part of their revenues from overseas.

The drop in the pound after Britain voted to leave the European Union last June boosted the FTSE 100, as its dollar-earning constituents received an accounting boost when converting their revenues back to pounds.

Some investors, however, were more cautious on the outlook for rate hikes.

"Given downside risks to global and UK growth as well as to inflation as the impact of sterling depreciation fades over the next few months, I think this hawkish shift will not last," Anna Stupnytska, global economist at Fidelity International, said.

Financials also fell, with HSBC (>> HSBC Holdings) and Barclays (>> Barclays) dropping 1.5 percent and 0.9 percent respectively, while mining stocks saw some sizeable declines as the price of copper slid on the back of disappointing data from China.

Shares in Rio Tinto (>> Rio Tinto), BHP Billiton (>> BHP Billiton Plc), Glencore (>> Glencore) and Anglo American (>> Anglo American) were all down between 2.4 percent to 3.4 percent.

Morrisons (>> Wm Morrison Supermarkets), Britain's No. 4 supermarket, fell about 5 percent after publishing first-half results.

British fashion chain Next (>> Next), however, was a bright spot with a 13 percent surge in its shares after it lifted its guidance, saying that it had managed to cushion the inflationary impact of a weak pound.

"Next remains a well-invested business that in our view has the operational and cost flexibility to deal with structural pressures posed by online, supported by strong and consistent cash generation," analysts at Investec said in a note, reiterating their "buy" rating on the stock.

(Reporting by Julien Ponthus and Kit Rees)

By Kit Rees

Stocks mentioned in the article
ChangeLast1st jan.
ANGLO AMERICAN -2.12% 1642 Delayed Quote.8.45%
BARCLAYS -0.15% 184.12 Delayed Quote.-9.16%
BHP BILLITON LIMITED 1.53% 33.82 End-of-day quote.12.65%
BHP BILLITON PLC 0.32% 1700.4 Delayed Quote.11.21%
BP 0.05% 558.5 Delayed Quote.6.81%
BRITISH AMERICAN TOBACCO 0.20% 4154 Delayed Quote.-17.32%
DIAGEO 0.90% 2821.5 Delayed Quote.2.61%
FTSE 100 INDEX 0.28% 7234.11 End-of-day quote.-5.90%
GLENCORE -1.29% 314.95 Delayed Quote.-18.23%
HSBC HOLDINGS -0.11% 714.8 Delayed Quote.-6.62%
LLOYDS BANKING GROUP -0.59% 61.13 Delayed Quote.-9.81%
NEXT -0.18% 5556 Delayed Quote.23.05%
PRUDENTIAL -1.88% 1750 Delayed Quote.-6.38%
RIO TINTO -1.41% 3770.5 Delayed Quote.-3.01%
STANDARD CHARTERED -0.91% 665.5 Delayed Quote.-13.81%
WM MORRISON SUPERMARKETS 0.25% 263 Delayed Quote.19.24%
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Financials ($)
Sales 2018 27 468 M
EBIT 2018 6 025 M
Net income 2018 3 095 M
Debt 2018 2 746 M
Yield 2018 4,93%
P/E ratio 2018 8,89
P/E ratio 2019 9,51
EV / Sales 2018 1,19x
EV / Sales 2019 1,18x
Capitalization 29 908 M
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Mean consensus OUTPERFORM
Number of Analysts 24
Average target price 25,1 $
Spread / Average Target 17%
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Managers
NameTitle
Mark Cutifani Chief Executive Officer & Executive Director
Stuart John Chambers Chairman
Stephen Thomas Pearce Finance Director & Non-Executive Director
Anthony Martin O'Neill Technical Director & Director
Philip Roy Hampton Senior Independent Non-Executive Director
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