FTSE 100 close: Commodity stocks lift Footsie
Miners and oil majors lifted the Footsie today as commodity prices ratcheted higher. The FTSE 100 closed up 32.0 points at 4,436.8.
Digging for gold: Mining stocks are on a roll as commodity prices keep rising
On Wall Street, the Dow Jones was recording a slight dip, with a 4.5 point fall to 8,758.5.
Continuing optimism on the global economy has helped lift demand for raw materials, and this in turn is boosting the oil and mining heavyweights.
Miners accounted for the Footsie's top five risers, led by Vedanta Resources, which gained 139p to 1770p. BHP Billiton was 39p higher at 1,534p, Xstrata 50p higher at 771.5p and Antofagasta 30p higher at 679p. Eurasian Natural Resources also improved 54.5p to 730p.
BP and Royal Dutch Shell were responsible for a large slice of the progress after oil prices set a new high for the year at $71 a barrel. Shell was up 25p at 1725p, while BP lifted 3.25p to 533p.
'For now investors are choosing to believe that their glass is half full, not half empty and the recovery in share prices is continuing,' said Jeremy Batstone-Carr, strategist at Charles Stanley.
'We see a further rise in share prices but things will become harder towards the end of the year as investors come to realise that we are not in a v-shaped recovery.'
Banks also saw good gains, supported by a note from JPMorgan, which remains 'overweight' on investment banks and traditional credit banks. Lloyds Banking Group was 2p higher at 65p and RBS was 1.8p higher at 37.9p. HSBC gained 18.25p to 536p.
The appetite for commodities saw investors taking their money out of more defensive blue-chip stocks, as Vodafone edged 2.35p lower to 112p and Centrica fell 2p to 229p.
Thomas Cook suffered a reversal of fortune, topping the fallers board after leading the winners yesterday as speculation continued about its future following the collapse of its majority shareholder, German firm Arcandor. Shares lost 16.75p to 219p.
London Stock Exchange, which is due for a return to the FTSE 100 index based on last night's closing prices, nevertheless lost 5p to 773.5p. Building supplies firm Wolseley celebrated its likely promotion with a gain of 17p to 1120p. The FTSE 100's quarterly review will be confirmed tonight and is likely to see Drax, insurer Amlin and Whitbread relegated, with 3i the third promoted stock.
In the second tier, spread betting firm IG Group continued its bounce after yesterday's update. Shares rose 17p to 259p as UBS raised its target price.
Charter International meanwhile headed a rout amongst mid-cap engineers. Its shares dived 87.75p to 476.25p after it warned that results will miss expectations by a substantial amount if the difficult trading conditions continue.
Merrill Lynch said in a note that it expects consensus earnings downgrades for Charter of up to 10% after the warning. However, the broker retains its 'buy' rating on Charter as it thinks the stock continues to look good value, trading at a little cheaper than its historical average.
Fellow FTSE 250 engineers Bodycote and Morgan Crucible followed Charter down, 4p to 147.25p and 3p to 97.75p respectively.
Meanwhile, bikes and car parts chain Halfords looks to be doing well out of the recession. But shares were 2p down at 343.5, after it said it had seen record sales of its new camping equipment ranges as hard-up holidaymakers look to save cash.
Halfords sells around one in three bikes in the UK, and both its cycling and car maintenance businesses maintained their 'strong potential' as the business gew underlying pre-tax profits 2% to £92.4m in the year to April 3.
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