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Miners propel FTSE higher, fresh 2011 high eyed

Published 02/07/2011, 11:56 AM
Updated 02/07/2011, 12:00 PM
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* FTSE up 0.9 percent, 2011 high at 6,090.49 eyed

* Miners gain along with metals, Randgold results

* Rexam rises on disposal reports

By David Brett

LONDON, Feb 7 (Reuters) - Miners lifted Britain's top share index higher on Monday, driven by record metal prices and results from Randgold.

The FTSE 100 closed 53.65 points, or 0.9 percent, firmer at 6,051.03, its highest finish Jan. 18 and marking the fourth gain in the past five trading days.

"A fresh year high is being eyed with worries over the impact euro zone debt problems and the political troubles in the Middle East fading," CMC Markets head of equities Jimmy Yates said. "It will be interesting to see if traders have the mettle to see it through that level (6,090.49) and hold onto gains."

Nicole Elliott, a technical analyst at Mizuho Corporate Bank, said the index was not far short of substantial resistance levels, with January's high at around 6,090 and the 2006 high of 6,137 both being watched.

Miners added most points to the index, spurred by record copper prices and boosted by upbeat corporate results.

Randgold Resources, up 2.6 percent, posted a 43 percent jump in profit and raised its dividend 18 percent.

Xstrata, set to report on Tuesday, gained 3.6 percent, helped by bullish comment from Citigroup and Nomura. Rio Tinto, which reports later in the week, was up 2.9 percent.

Energy stocks climbed as appetite for riskier assets strengthened among investors, with BG Group 0.8 percent higher ahead of results due on Tuesday.

IN THE CAN

Can maker Rexam firmed 3.4 percent. The company has appointed Barclays Capital to sell its beverage and specialties arm in a deal that could be worth 200 million pounds ($322 million), the Mail on Sunday reported.

ARM Holdings was the top blue-chip gainer, 3.9 percent higher, as Numis raised the chip designer's price target to 660 pence on promising long-term revenue drivers.

On the downside, BT Group shed 1.5 percent as investors locked in profit following results on Feb. 3.

Meanwhile, insurers Old Mutual and Resolution dipped 0.9 percent and 1.6 percent respectively on the back of recent strength. The sector has been supported by bullish broker comment and persistent M&A speculation.

Small-cap Lloyd's of London insurer Chaucer said it had received takeover approaches from an unspecified number of suitors, lifting its shares 17 percent.

There was little key economic data early this week for investors looking to the Bank of England's monthly interest rate decision, due on Thursday.

No changes were expected to the 0.5 percent official bank rate or an increase to the BoE's quantitative easing programme.

"I think we are seeing, with copper hitting a new high, that there is concern over inflation, and at some point, if it is not this week it will be very soon, that the Bank will raise rates," Capital Spreads head of sales Angus Campbell said.

Money markets see a 10-20 percent chance of a rise in the official bank rate on Feb. 10.

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