Commodity shares led the way again today as miners benefited from a Credit Suisse upgrade and the oil price continued to rise.
Among the miners BHP Billiton added 54p to £15.16, following an upbeat presentation in the City by the company's incoming chief executive Marius Kloppers.
Credit Suisse this morning upgraded its forecasts for base metals by up to 50% and for precious metals by 20%, saying supply is not keeping pace with demand. It has raised its target price for several of the miners, including lifting Xstrata from £30 to £35. Xstrata's shares added 96p to £32.66, while Vedanta Resources was also wanted, up 52p to £17.01.
Rio Tinto recovered from early losses and edged up 2p to £40.03 after talk it was preparing to get involved in the $28bn hostile bid for aluminium specialist Alcan from North American rival Alcoa, by bidding for one or the other.
Elsewhere crude oil climbed to more than $76 a barrel, an 11-month high, on strong demand, concerns about falling inventories in the US and worries about unrest in Nigeria.
So Royal Dutch Shell A shares rose 59p to £21.15 and BP was 6.5p better at 610.5p. They were helped by Deutsche Bank issuing a buy note on both companies and increasing its price targets. It has lifted its BP target from 580p to 670p and its Shell forecast from £19.50 to £23.75p.
It also raised BG from 890p to 925p, prompting a 16p rise in the gas group's share price to 829p.
The rise in the oil and mining companies outweighed continuing worries about further interest rate rises, and by the close the FTSE 100 was 54.9 points better at 6690.1. Investors had been keeping their powder dry ahead of the afternoon's non-farm payroll figures from the US.
In the event the figures were stronger than expected, reducing the chances of a US rate cut later this year. Some 132,000 US jobs were created in June, compared to economists' predictions of 120,000. The May figure was revised upwards from 157,000 to 190,000.
John Ward of the Centre for Economic and Business Research said: "Our view is that the Fed will stay put [on interest rates] for the time being, taking into account the fact that the US economy is still largely reliant on the strength of the consumer." Wall Street took the figures in its stride and recorded a near 50 point rise by the time trading ended in London.
Back in the UK, retailers turned in a mixed performance after the Bank of England's decision yesterday to raise rates. Analysts pointed to concerns about the effect that dearer borrowing will have on consumer spending, especially given the poor weather in the past few weeks.
So B&Q owner Kingfisher fell 3p to 222.75, but Marks & Spencer bounced back from early falls to close 2p higher at 628p. Deutsche Bank cut its price target for M&S from 830p to 815p but said the shares were still a buy. "We are certain that trading has been weak in June - it's been the wettest June ever," said Deutsche. "But we are equally confident that the recovery program is intact and that this is an excellent buying opportunity."
Chemicals group ICI fell 5p to 615p on reports it had issued a put up or shut up demand to potential bidder Akzo Nobel. Later the Takeover Panel announced Akzo must decide by August 9 whether it planned to make an offer after ICI rejected an earlier 600p a share approach.
Evolution Securities said it believed Akzo will override protests against a bid from activist investors and press ahead with an offer. "We see a bid being put on the able at 650-700p in the not too distant future," said analyst Peter Cartwright.
Aero engine maker Rolls-Royce slipped 1.5p to 551p after Citigroup issued a sell note with a 480p a share target price.
But property company British Land, which yesterday announced plans to buy back 1m shares at around £13.69, added 3p to £13.69p. Cazenove has rated the company as outperform, saying it trades at a near 21% discount to net asset value.
Insulation specialist SIG issued a trading statement showing strong growth in the first half with six months sales more than £1bn for the first time. Killik & Co said the shares remained good value and the company should benefit from economic growth in continental Europe - where it has 89% of its sales - and increased legislation to improve energy efficiency in buildings. SIG added 113p to £14.58.
Cooker maker Aga added 275p to 412.5p on news it is to sell its foodservice business and forecast a first-half profit of £22m from contining businesses. It decided to sell the foodservice division after failing to buy kitchen equipment manufacturer Enodis last year. Numis analysts said their valuation of the foodservice business was £215m, and they repeated their buy recommendation on Aga shares.
Lower down the market, private investor interest helped lift medical group Immunodiagnostic Systems 16.5p to 280p. As was foreshadowed here, the company is planning to pay £17m in cash and shares for Nordic Bioscience Diagnostics, a Danish testing kits business.
Broca, which provides technology to encrypt SMS messages, jumped 14p to 83.5p after it signed a sales deal with Vodafone.
TV shopping company Ideal Shopping Direct edged down 0.5p to 234p after the resignation of finance director Mike Camp effective immediately. Jonathan Pritchard of Oriel Securities said: "His replacement David Blake has worked for various telecoms companies but is unknown to us. [Camp's] departure can hardly be seen as good news, especially as there is no mention of what he is going on to do. We next hear from Ideal in September for interim results but we cannot imagine life has been good of late. We would continue to tell investors to sell and put their money elsewhere."
Oil group White Nile slumped 17p to 90p after Sudan apparently decided it wants the company to withdraw from a disputed oil block in the south of the country, with compensation to be assessed. The company said it was taken by surprise by the news. It has already paid out some $18m on testing alone at the site.
Finally Tristel, the Aim-listed specialist in infection containment products, added 0.5p to 61p. Non-executive director Peter Stephens has bought 20,000 shares at 60.5p each.