💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

Miners propel FTSE to 5-month closing high

Published 10/13/2010, 12:41 PM
Updated 10/13/2010, 12:44 PM
GC
-
HG
-
SI
-

* FTSE 100 up 1.5 percent

* Miners firm; copper hits new 27-month high

* StanChart falls on rights issue

By Tricia Wright

LONDON, Oct 13 (Reuters) - Strong miners helped drive Britain's top share index to a more than five-month closing high on Wednesday, 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 percent, at 5,747.35, its highest closing level since April 26, and its biggest one-day percentage rise since Sept. 20.

Miners led the charge, with Vedanta Resources and Anglo American up 5.9 percent and 5.4 percent 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 that 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 percent after it said its silver and gold production rose to a record in the third quarter, beating expectations, and reiterated that it is on track to meet its full-year targets.

Announcements from China also helped, with the government saying it will promote sales of construction material in rural areas, and as the world's fastest-growing economy reported soaring crude imports.

Integrated oil stocks were led higher by BG Group, up 2.4 percent, 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 percent respectively after Washington lifted its ban on deepwater drilling seven weeks ahead of schedule.

EARNINGS BOOST

Also underpinning market gains were positive earnings from U.S bank JPMorgan, which followed chipmaker Intel's upbeat fourth-quarter sales outlook overnight.

However, UK banks largely missed out on the rebound after Asia-focused Standard Chartered, down 1.7 percent, announced plans to raise $5.3 billion via a rights issue.

Barclays slipped 0.9 percent as traders speculated that the UK bank may have to raise up to 8 billion pounds due to forthcoming tighter regulatory capital requirements, based on Standard Chartered's move.

ICAP climbed 4.7 percent after Barclays Capital lifted its target price for the inter-dealer broker (IDB) to 535 pence from 500 and said ICAP remains its top pick among exchanges/IDBs.

Reed Elsevier added 2.5 percent, with traders citing talk that Wolters Kluwer is interested in making a bid for the Anglo-Dutch publishing company.

Luxury group Burberry topped the FTSE 100 fallers' list, off 3 percent, as some analysts questioned whether a small upgrade in profit guidance was enough to sustain recent strong gains.

(Editing by Erica Billingham)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.