British shares ended a four-day losing streak on Thursday, with the blue-chip FTSE 100 index adding 0.13% at closing, thanks to the continuous growth of the UK private sector, albeit at a slower rate. Anglo American ($AAL) stood out among the stocks, increasing by 2.88% after it raised its production guidance for refined platinum group metals and nickel for the full year 2024.
The British mining giant reaffirmed its output targets for other commodities. Experts have pointed out that there is potential for a material re-rating in the medium-term as Anglo American executes its restructuring plan, which is expected to simplify its portfolio to a 60% exposure to copper. In addition, an anticipated recovery in platinum group metal (PGM) and diamond prices could enhance market sentiment.
However, the comment from RBC Capital Markets indicates that a renewed approach from BHP could also be on the table, especially with the end of November deadline looming. The firm stated, "However, we view the outlook as more balanced in the near term given the potential for value leakage during the divestment process and the below-average free cash flow yield expected in the coming two years." In economic news, flash data from S&P Global Market Intelligence revealed that the UK's private sector economy grew at a slower pace in October.
The Flash UK PMI Composite Output Index dropped to an 11-month low of 51.7 from the previous month's 52.6. Similarly, business activity in the UK services sector eased in October, with its corresponding index falling to an 11-month low of 51.8, down from 52.4 in September. The manufacturing PMI also declined, landing at a six-month low of 50.3, compared to 51.5 from the preceding month. S&P Global Market Intelligence's Chief Business Economist, Chris Williamson, remarked, "The early PMI data suggests that the economy is growing at a meager 0.1% quarterly rate in October, showing a broad-based slowdown in business activity, spending, and demand across both manufacturing and services sectors." Meanwhile, findings from the Confederation of British Industry's quarterly industrial trends survey indicated that sentiment in the UK's manufacturing sector has decreased at its fastest rate in two years, with output volumes in the sector falling in the quarter leading to October, though at a slower pace than in the quarter leading to September..