London Markets: 442-carat diamond discovery sends shares of small miner soaring in London

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Gem Diamonds’s newest 442-K diamond discovery

For most U.K. investors, Friday was steeped in gloom with the FTSE 100 index tracking global losses and the pound slumping on a failed Brexit meeting., but not for shareholders of Gem Diamonds.

Shares of the small miner GEMD, +10.71% surged 10% after the company announced the discovery of carat Type II diamond from the Letšeng mine in Lesotho, South Africa. It’s the “highest dollar per carat kimberlite diamond mine in the world,” said the global miner.

A portion of the profits from the sale of the diamond will go to fund a special community project in conjunction with the local government of Lesotho, said Gem Diamonds.

Elsewhere, the pound and euro fell sharply after the U.K.’s chief negotiator David Frost said the latest Brexit talks concluded with “little progress.”

Sterling GBPUSD, -1.09% slumped nearly 1% against the dollar to $1.3098, while the euro EURUSD, -0.70% fell 0.8% to $1.1754. Weakness in those major currencies pushed the ICE Dollar Index DXY, +0.54% up 0.7% to 124.61.

“Substantive work continues to be necessary across a range of different areas of potential UK-EU future cooperation if we are to deliver it,” said Frost, in a statement.

“As we’ve seen so often before, both sides have left the talks seemingly frustrated with the others refusal to cede ground on various points but still hopeful of a deal,” said Craig Erlam, senior market analyst at OANDA, in a note to clients.

The pound’s losses helped stem a fall for the FTSE 100, down 0.5% to 5,984.10, with the downside driven by losses for drug stocks, major oil companies and banks. Heavily-weighted AstraZeneca PLC AZN, -1.41% fell 1.7%.

Shares of Royal Dutch Shell PLC UK:RDSA and BP PLC UK:BP fell around 1.5% each , tracking lower oil prices with U.S. benchmark UK:CRUDE OIL – WTI and Brent crude UK:BRENT CRUDE down over 1% each on demand worries.

Friday also saw a crop of mixed economic data, with U.K. retail sales bouncing back in July, but led by supermarkets and food stores while clothing retailers suffered. The August IHS Markit was more upbeat, but elsewhere data showed U.K. national debt skyrocketed to just over 2 trillion pounds for the first time amid spending to rescue the economy from coronavirus fallout.

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