THE LONDON REPORT
BRITAIN’S leading stock index closed 1.6 per cent higher yesterday, with heavyweight banks, miners and energy stocks reversing early losses, helped by a strong opening for the US market.
The FTSE 100 rose 83.5 points, or 1.6 per cent, to close at 5,165.70, after rising 0.1 per cent on Friday.
“It wasn’t until the US open that the markets turned themselves,” said head of equities at CMC Markets Jimmy Yates.
“While we still have weakness in the US dollar and no sign of exit strategy from the global stimulus plans then we could still see strength in global equities,” he added.
Banks led the gainers as investors turned once more to riskier assets, spurred on by the opening rally in New York.
Standard Chartered rose 1.7 per cent, as Royal Bank of Scotland hiked its target price to 2,000p from 1,600. However, RBS itself dropped 0.8 per cent, as ING cut its recommendation on the stock to “sell” from “hold”.
Lloyds Banking Group, HSBC and Barclays rose 0.3-2.7 per cent.
Energy stocks surged as oil pushed back above $67 a barrel on the back of a weakening dollar, and as tensions between Iran and the West increased.
BP, BG Group and Royal Dutch Shell added 0.5-2 per cent. Meanwhile, Cairn Energy and Tullow Oil shed 0.3 and 1.5 per cent, respectively.
Miners shrugged off concerns over the falling price of copper, which hit its lowest level since mid-August on worries over rising inventories, further falls in Chinese imports and still tepid indications of a pick-up in demand outside China, as M&A activity lifted the sector.
BHP Billiton rose 2.7 per cent as Aim-listed coal miner Churchill Mining said it had received three separate approaches but denied press speculation linking the company to BHP Billiton.
Fresnillo, Antofagasta, Xstrata, Lonmin, Rio Tinto and Randgold Resources gained 2.1 to 3.9 per cent.
Defensive tobacco and pharmaceutical companies were also higher. Imperial Tobacco closed 0.3 per cent up.