BP boosts FTSE as miners, telecoms and banks surge
BRITAIN’S top share index ended close to a seven-month high yesterday, as better-than-expected earnings from the likes of BT boosted sentiment, lifting miners, banks and telecoms firms.
The FTSE 100 closed up 1.9 per cent, or 84.08 points at 4,631.61 points, the highest level since January 6. The index is up 9 per cent so far this month, on track for its best monthly gain since September 1992.
BT was the top gainer, up 13 per cent, as the fixed-line telecoms firm posted a smaller-than-expected 3 per cent dip in first-quarter adjusted core earnings and said it was on track to deliver cost cuts. The UK index has gained over 34 per cent since hitting a six-year low in March and is up 4.5 per cent in 2009.
“We enjoyed some good days in late July and this may stretch through into August but from September I see us trading sideways,” said Howard Wheeldon, strategist at BGC Partners.
“We’ve had over the last three to four months a pretty good recovery run. I think it is not being matched by true economic form and at some point we are going into a long period of sideways momentum.”
Miners added the most points to the index, with Rio Tinto, BHP Billiton, Xstrata and Eurasian Natural Resources adding 5.5 to 8.7 per cent. Chilean copper miner Antofagasta gained 7.8 per cent after reporting a 6.6 per cent dip in first-half copper production, slightly better than expected.
Platinum miner Lonmin was another strong performer, up 8.5 per cent as Citigroup upgraded it to “buy” from “hold”.
Banks also gained in one of the busiest days for earnings reports, with Barclays, HSBC, Lloyds Banking Group, Royal Bank of Scotland and Standard Chartered up between 0.8 and 4.4 per cent.
Energy stocks were also in demand, with BP up 0.4 per cent, Tullow Oil 1.5 per cent higher and Cairn Energy adding 1.9 per cent, helped by a firming crude price.
Royal Dutch Shell gained 0.8 after a better-than-feared 70 per cent fall in the oil major’s second quarter net profit.
Shares in building supplies company Wolsley added 10.4 per cent, as peer Travis Perkins beat forecasts with a 27 per cent fall in first half profits. Also on the upside, British engine-maker Rolls-Royce climbed 9.3 per cent, after the company posted a 9 per cent rise in underlying first-half pre-tax profit, towards the top end of expectations.