THE LONDON REPORT
BRITAIN’S top share index hit its highest closing level in more than 14 months yesterday as a weaker dollar sparked a rally in metals prices and some upbeat US data lifted market sentiment.
The FTSE 100 ended up 86.29 points, or 1.6 per cent, at 5,382.67, its highest close since September 2008 and notching up its fourth consecutive session of gains.
The index is only 0.6 per cent below its level before the collapse of Lehman Brothers in mid-September 2008 and has surged 55.5 per cent from a six-year low in March.
Miners buoyed by metal price advances spearheaded a rally with gold hitting a record high near $1,135 an ounce. Antofagasta, Xstrata, Rio Tinto and Randgold Resources added 4.8 to 7.8 per cent. Lonmin topped the blue-chip leader board, adding 9.3 per cent, as the world’s third-biggest platinum producer said it planned to boost output by a fifth by 2013 as prices climb on shortages.
“After struggling in recent weeks, the major indices today seem to have signalled that the eight-month recovery for share prices is not over and has spurred traders to get their buying hats back on,” said Tim Hughes, head of sales trading at IG Index.
“After the strong gains seen today, there is scope for at least a slight pullback in the days ahead, but for now it looks likely this will be treated as an opportunity to
buy into any dips on the belief that momentum really has returned.”
The index was given a fillip by data from across the Atlantic. US retail sales were up 1.4 per cent in October, a welcome sign heading into the holiday season, though a separate report showed manufacturing in New York State fell this month.
Energy firms were big winners, underpinned by a 3.4 per cent rise in crude prices BG Group, BP and Royal Dutch Shell rose 1.2 to 2.4 per cent.
BP said yesterday it found oil at its appraisal well in Kaskida field in the Gulf of Mexico. Banking stocks were led higher by a 2.6 per cent rise in heavyweight HSBC, which added to gains from last week when it released a strong third-quarter update.