Miners lead markets higher as gold price holds steady
THE top share index ended 0.9 per cent higher yesterday, buoyed by the miners on firmer metals prices and optimism over demand prospects.
The FTSE 100 closed 45.74 points higher at 5,154.64, after shedding 0.6 per cent on Wednesday.
“There doesn’t seem to be the same degree of buying momentum returning to the market after a correction that we’ve seen in the past and we’re still below the resistance level of 5,200, so still a bit of a test ahead,” said Angus Campbell, head of sales at Capital Spreads.
Next week sees a swathe of US companies reporting, including General Electric, Intel, JPMorgan Chase, Citigroup, Goldman Sachs and Bank of America.
Miners added the most points to the UK index, boosted by a rise in metals prices, including gold which held near a record high, and by Alcoa detecting signs that key markets were stabilising and expecting global consumption to rise by 11 per cent in the second half of this year.
India-focused mining group Vedanta Resources added 4 per cent after posting a 15.6 per cent rise in second-quarter output of refined zinc and a 27.3 per cent increase in iron ore, its two most important minerals, in second-quarter.
BHP Billiton, Lonmin, Fresnillo, Xstrata, Kazakhmys, Rio Tinto and Randgold Resources added 1.7 to 4.9 per cent.
Energy stocks were also in favour, rebounding after falls the previous session as the crude price rose above $71 a barrel. BG Group, BP, and Cairn Energy gained between 0.3 and 2.4 per cent.
Insurer Legal &General, which continues to be a subject of buyout attention, saw its shares rise 2.6 per cent to 87.5p as it emerged the firm had rejected a 110p a share bid from Australia’s AMP.
Strength was seen among banking stocks. Heavyweight HSBC put on 0.8 per cent, while Standard Chartered added 3.3 per cent and Barclays rose 1.5 per cent.
Lloyds Banking Group was off 1.4 percent after it emerged the part-nationalised lender was sounding out investors about a £15bn rights issue to help it avoid a government scheme to insure against credit losses. RBS was also on the back foot, down 1.4 per cent.
Pharmaceuticals GlaxoSmithKline and AstraZeneca rose 0.3 per cent and 0.2 per cent, respectively, helped by a key report which showed global pharmaceutical sales were proving more resistant than expected to the economic slowdown.