Miners and hopes of more easing in US push London to a five month high
Strong miners helped drive Britain’s top share index to a more than five-month closing high yesterday, boosted by firmer metals prices and hopes for fresh economic stimulus in the United States.
The FTSE 100 index ended up 85.76 points, or 1.5 per cent, at 5,747.35, its highest closing level since April 26, and its biggest one-day percentage rise since 20 September.
Miners led the charge, with Vedanta Resources and Anglo American up 5.9 per cent and 5.4 per cent respectively, as the weak dollar encouraged demand for dollar-denominated commodities, with copper at a 27-month high.
“We’re mainly being charged higher by the miners. It’s all about the fact traders are now pricing in extra stimulus from the Fed after the FOMC [minutes] last night, so we’re expecting it to happen early next month,” Joshua Raymond, market strategist at City Index, said.
Mexican precious metals miner Fresnillo added 3.3 per cent after it said its silver and gold production rose to a record in the third quarter, beating expectations, and reiterated it is on track to meet full-year targets.
Announcements from China also helped, with the government in Beijing saying it will promote sales of construction material in rural areas, and as the world’s fastest-growing economy reported soaring crude imports.
Gas exploration company BG Group led integrated oil stocks higher, up 2.4 per cent, on talk of a possible bid from China’s CNOOC, traders said.
And oil services firms AMEC and Petrofac added 3.6 and 4.2 per cent respectively after Washington lifted its ban on deepwater drilling seven weeks ahead of schedule.