🔴 Exclusive webinar: The Secrets of ProPicks AI Success Revealed + November’s List FREEWatch Now

Rallying miners help FTSE higher; banks weak

Published 02/14/2011, 04:31 AM
Updated 02/14/2011, 04:36 AM
GC
-
PL
-

* FTSE 100 index up 0.1 percent

* Miners lifted by firmer metal prices

* Banks retreat on bonuses concerns ahead of results season

LONDON, Feb 14 (Reuters) - Britain's leading share index ticked higher in early deals on Monday, modestly extending gains from Friday, as heavyweight miners rallied in tandem with metal prices, with economic data from China supportive.

By 0920 GMT, the FTSE 100 index was up 5.98 points, or 0.1 percent at 6,068.88, drifting back having hit a year-high early on, The UK blue chip index closed up 42.89 points, or 0.7 percent at 6,062.90 on Friday.

Miners provided the main support in London, lifted by firmer metals prices on talk Chinese inflation could come in lower than expected, easing fears of further interest rate rises from the world's biggest consumer of commodities.

Traders said China's consumer price index may have risen 4.9 percent in the year to January, well below the consensus forecast of 5.3 percent, a day ahead of the official release.

Meanwhile, Chinese economic data showed a smaller than expected trade surplus in January as imports grew faster than exports.

Platinum miner Lonmin was one of the best sector performers, up 1.5 percent, supported by upgrades in ratings from both Goldman Sachs and Exane BNP Paribas.

"Miners are getting a boost from China, but the underlying mood remains fragile with banks weighing ahead of the reporting season on concerns that big bonus payments might spark further government action," said Mic Mills, head of electronic dealing at ETX Capital.

Banks were the worst blue chip performers as a sector, with partly state-owned Lloyds Banking Group down 0.6 percent, and global heavyweight HSBC losing 0.7 percent.

Britain's banks need radical reform to end a culture of paying "offensively" large bonuses, Business Secretary Vince Cable, a long-time critic of the sector, said.

Howwever, Barclays, which kicks off the sector reporting season with full-year results on Tuesday, rallied 0.8 percent higher after recent weakness.

International Consolidated Airlines Group was the worst blue chip performer, down 1.9 percent as a number of brokers cut target prices for the firm -- formed by the merger of British Airways and Spain's Iberia -- following a warning last week from European peer Air France-KLM.

ENERGY BOOST

Energy issues gained, led by BG Group up 1.8 percent, although the crude price fell as the resignation of Egypt's President Hosni Mubarek on Friday eased concerns about any disruption to oil supplies along the Suez Canal.

Indian-focused Essar Energy gained 2.5 percent as BofA Merrill Lynch started coverage of the stock with "buy".

Oil services blue chip Petrofac, up 3.1 percent got a boost from acquisition moves in the sector.

Peer John Wood Group was the top mid cap riser, up 14.7 percent, on news U.S. giant General Electric Co is to buy the well support division of the British energy services firm for about $2.8 billion.

Vague takeover gossip also gave a boost to engineering blue chips Invensys and Weir Group, the top two FTSE 100 gainers, both up around 5 percent.

Technical analysis for the FTSE 100 was cautiously optimistic.

"Based on the short-term range of 6,091.33 to 5,973.44, the close over the retracement zone at 6,032.39 to 6,046.30 puts the index in a strong position to breakout to the upside," James Hyerczyk, an analyst at Autochartist, said. (Editing by Hans Peters)

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.