Mining index pushes ZSE up

HARARE – Trading on the Zimbabwe Stock Exchange (ZSE) opened the week on high note, with the mining index bouncing back from a lacklustre performance last week.

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IOL pic jan26 britain ftse

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The Mining Index was up 0.90 points to close at 59.93 points after BINDURA inched up by 0.10 cents to 5.20 cents.

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FALGOLD, HWANGE and RIOZIM were unchanged at 3 cents, 4 cents and 15 cents respectively.

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The industrial index maintained its upward momentum, moving up by 0.54 points to close at 169.91 points.

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EDGARS traded 2 cents higher at 10 cents and DZL added a cent to close at 9 cents.

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ECONET gained 0.91 cents to settle at 55.02 cents, POWERSPEED put on 0.40 cents to 2.20 cents and ZPI was up 0.10 cents to close at 1.20 cents.

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On the downside, HIPPO lost 3 cents to 45 cents and TURNALL dropped 0.10 cents to 1.10 cents.

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Britain’s top equity index retreated on Monday, as a fall in major utility stocks weighed on the market.

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The blue-chip FTSE 100 index fell 0.9 percent to 6,793.17 points in early session trading, with United Utilities and Severn Trent down 3.7 percent and 2.8 percent respectively – the worst FTSE stocks in percentage terms.

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Traders said the fall in UK utility stocks was a result of a drop in the shares of their US rivals on Wall Street on Friday, when the S&P 500 index of utilities had its biggest daily percentage drop since August 2011.

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US utility stocks were hit after US government debt yields rose following strong US jobs data that supported expectations of a rise in US interest rates by mid-year.

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Utility companies tend to have large amounts of debt in order to operate their networks, and so any rise in interest rates would lead to higher borrowing costs for them.

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“The rise in the bond yields and the weakness in the US sector is hurting the UK utilities,” said Securequity sales trader Jawaid Afsar.

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Gold mining shares Fresnillo and Randgold outperformed the broader market pullback to rise by 1.8 percent and 1 percent respectively. Both stocks were lifted by a rise in the price of gold, whose safe haven appeal was boosted following weak Chinese data over the weekend.

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Randgold also softened the blow of reporting lower profits on Monday by lifting its dividend.

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The FTSE 100 reached a peak last year of 6,904.86 points, its highest since early 2000, although it lost ground at the end of 2014.

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The index is up around 3 percent so far in 2015, but Horizon Stockbroking director Kyri Kangellaris was reluctant to buy into the FTSE for now, due to ongoing worries over Greece’s economy and concerns over a possible slowdown in China.

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“I’d rather be a seller at these levels than a buyer,” he said.

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Europe

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European shares fell in early trading on Monday, tracking losses on Wall Street and in Asia, with disappointing Chinese trade data further raising concerns about the pace of economic growth in the world’s second-biggest economy.

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Data on Sunday showed that China’s trade performance slumped in January, with exports falling 3.3 percent from year-ago levels and imports slipping 19.9 percent, far worse than analysts had expected.

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The pan-European FTSEurofirst 300 index was down 0.7 percent at 1,480.42 points by 08h06 GMT.

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Investors also remained cautious following jitters over Greece. Leftist Prime Minister Alexis Tsipras laid out plans on Sunday to dismantle Greece’s “cruel” austerity programme, ruling out any extension of its international bailout and setting himself on a collision course with his European partners.

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Standard & Poor’s cut Greece’s rating on Friday, while Moody’s said it was placing Greece’s government bond rating on review for downgrade.

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