THE LONDON REPORT
The FTSE 100 rose for a third straight session yesterday to close up by 0.5 per cent, boosted by bullish economic data from the US, as oils, miners and banks underpinned the rally.
The index ended 23.28 points higher at 5,042.13, after trading as low as 4,996.52 earlier in the session.
Energy stocks were higher, underpinned by a strengthening US dollar which rose against a basket of currencies and lifted crude, which hovered around $69 a barrel.
BP, Royal Dutch Shell and Cairn Energy gained 0.6 to 3.7 per cent.
BG Group added 1.4 per cent after unveiling another discovery in the Santos Basin concession, offshore Brazil. Oil and gas explorer Tullow Oil, up 1.2 per cent, also got an additional boost from bid speculation, with market chatter mentioning Italian ENI as a possible predator.
International Power was up 2.6 per cent in a read across from news that China’s sovereign wealth fund is eyeing a stake in US power peer AES.
Takeover speculation also saw Man Group climb 3.2 per cent on rehashed bid talk.
Banks were mixed. Royal Bank of Scotland, HSBC and Standard Chartered rose 1.3 to 1.4 per cent, while Lloyds Banking Group and Barclays were 0.6 and 0.2 per cent lower respectively.
Bank of England Governor Mervyn King said the central bank was looking at reducing the rate on commercial banks’ reserves, fuelling speculation of further quantitative easing. The comments sent sterling lower.
Miners gained as metal prices rebounded from the previous session’s lows. Fresnillo, Rio Tinto, Xstrata, BHP Billiton and Kazakhmys added 0.5 to 3.7 per cent.
Also on the upside, BT Group rose 4.4 per cent, buoyed by a Credit Suisse upgrade to “outperform” from “neutral”, while precious metals and chemicals firm Johnson Matthey gained 3.2 per cent following a Goldman Sachs upgrade.
Rexam fell 2.2 per cent after Credit Suisse removed the drinks can maker from its Focus List, and technology firm Smiths Group shed 1.7 per cent after Morgan Stanley cut its rating to “equal-weight”.