FTSE charges higher by 1% on miners, pharma and oil firms – Cocoa rises on export ban call

<p>The FTSE 100 Index powered higher by 1% on Monday with strong buyer interest in mining, pharmaceutical and oil firms enough to outweigh weakness in […]</p>

The FTSE 100 Index powered higher by 1% on Monday with strong buyer interest in mining, pharmaceutical and oil firms enough to outweigh weakness in banking equities.

The FTSE 100 has been the standout performing Index in wider Europe today due in part to the miners, which are heavyweights on the FTSE 100 Index, more so than any other main European exchange. A 1% rise in the price of Copper today, along a weaker US dollar is helping to lock in a positive session from mining firms.

There has been positive connotations out of the Us today, with Intel hiking its dividend by 15% and authorising another $10 billion in its stock buyback programme, which is giving some UK investors a nice confidence boost. Intel is a tech bellwether.

We have also seen the pound sterling fall today on calming tensions over fears that the Bank of England will raise rates sooner than expected this year and this in turn has helped to brighten equities in the UK also.

It seems however that much of today’s gains have been driven by technical factors as opposed to fundamental ones, with the FTSE 100 finding support around the 5890 level to push higher towards the next technical target of 5950. If the UK Index can cement its gains above 5950, the next technical target is 6117.

Cocoa hits 1-year highThe recent move higher has been driven by uncertainty over cocoa production within the Ivory Coast, which is the world’s largest cocoa producer. Investors hate uncertainty and it is safe to say that there is a high amount of uncertainty and confusion about exactly what the impact on cocoa exports is going to be after Mr Ouattara’s call to ban exports. The tactic from the man who is internationally recognised as the Presidential election winner is an attempt to starve cash from incumbent Mr Gbagbo.

It is firmly looking like the battle to take over the presidency could be as much a battle to control cocoa exports which incumbent Mr Gbagbo allegedly relies on to pay the army and state workers to maintain his grip on power. All of this is helping to drive the price of cocoa to a new yearly high and whilst the uncertainty over production and exports continues, this is likely to keep cocoa prices inflated. Traders buying into the rally need to be aware of price dips however as any bouts of profit taking could drop prices sharply.

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