February 26, 2018 / 5:02 PM / in 19 days

UPDATE 1-FTSE 100 starts week on firm footing as miners, AB Foods rise

(Adds closing prices)

* FTSE 100 up 0.6 pct

* Miners, AB Foods among top gainers

* Provident Financial drops after rights issue report

By Kit Rees

LONDON, Feb 26 (Reuters) - Britain’s top share index rallied on Monday, shaking off last week’s slight decline as firmer commodity stocks and Associated British Foods propped up the FTSE.

The blue chip FTSE 100 index closed up 0.6 percent at 7,289.58 points, while mid-caps gained 0.1 percent.

While individual moves on the FTSE were mostly muted, mining stocks led the gainers with shares in Anglo American, precious metals miner Randgold Resource and silver miner Fresnillo rising between 1.3 percent to 3.1 percent as underlying metals prices gained.

The FTSE 100 posted a slight loss last week, struggling to make further gains following a sell-off at the beginning of February, when concerns over higher inflation and rising bond yields hit equity markets globally.

Shares in Associated British Foods were also among top gainers, up 3.1 percent, after the Primark owner gave an update which forecast total first-half sales at Primark up around 7 percent at constant currency rates, though the group was held back by a reduction in sugar revenues.

“Today’s trading update shows mixed fortunes for the group. Primark sales are very good in the UK but the retailer’s overall like-for-like sales were down 1% for the half year to 3 March,” Russ Mould, AJ Bell investment director, said.

Shares in Standard Life Aberdeen were among the biggest fallers, down 1.4 percent as analysts continued to ponder the implications of the sale of SLA’s insurance unit to Phoenix.

While analysts at broker Bernstein raised their target price for SLA, saying that on balance they liked the deal with Phoenix, analysts at CFRA Research reduced their target price for the stock.

“With only limited details available, we think the market is still in ‘fact-finding’ mode around the Phoenix transaction, and look forward to more clarity on what earnings profile SLA will be left with in Pensions & Savings,” analysts at Bernstein said in a note.

Individual stock moves were more pronounced among mid-cap firms, with Provident Financial the biggest faller, down 10 percent following a report in the Sunday Telegraph that the troubled subprime lender intends to raise as much as 500 million pounds ($701.55 million) to pay fines and repair its balance sheet.

Underwriter Hiscox fell 2.1 percent on the back of its annual results, which included a 90 percent fall in full-year pretax profit due to a spate of natural disasters in the third quarter of 2017.

Reporting by Kit Rees; Editing by Tom Pfeiffer and Matthew Mpoke Bigg

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