FTSE close: Miners surge, Reckitt Benckiser up

By This Is Money
Updated:

 

17.05 (close)

Stock Market Financial Trading Screen

On the up: UK shares should rise.

London's blue chip share index closed at its highest level for more than a month today as mining stocks surged on relief over China's decision not to raise interest rates.

The FTSE 100 Index added 47.8 points to 5860.8, while markets worldwide also made gains due to cheer over China.

There had been fears Beijing would hike rates after Chinese inflation jumped to a 28-month high of 5.1%.

However, investors were relieved that an annual economic meeting ended on Sunday with just a pledge to control inflation while shifting the economy toward more stable, balanced growth.

Wall Street's Dow Jones Industrial Average rose more than 30 points soon after opening, while across Europe the Cac 40 in France lifted 0.9%.

But sterling suffered a difficult session, hit by a weak housing survey from property website Rightmove and after deputy Bank of England governor Charles Bean suggested more monetary easing was possible.

The pound fell to 1.19 euros and was down against most major currencies.

Among stocks, the top flight risers board was dominated by resources stocks as Kazakhmys climbed 63p to 1592p and silver miner Fresnillo cheered 61p to 1594p.

Household goods giant Reckitt Benckiser was also on the rise, up 2% or 64p to 3573p, as news of its deal to buy India's Paras Pharmaceuticals was taken well.

Analysts praised the acquisition for expanding Reckitt's market share in such a key emerging market.

The FTSE 250 Index was dominated by merger and acquisition activity in the oil and gas services sector.

Wellstream Holdings backed an £800m takeover offer from America's General Electric.

GE's latest proposal, which followed two rejected offers, caused shares in Newcastle-based Wellstream to rise 43p to 790p, up 6%.

Elsewhere in the energy services industry, John Wood Group announced an agreement to buy fellow Aberdeen-based firm PSN for $955m (£600m) and added that the deal will be significantly earnings enhancing.

Shares in John Wood were near to the top of the FTSE 250 Index, up 7% or 32.8p to 521p.

Plant-hire company Ashtead followed them on the second tier risers board after a broker upgrade in the wake of last week's forecast-beating half-year profits.

Its shares rose 4.6p to 159.9p, having soared last week on its results cheer.

But pub group JD Wetherspoon was seeing falls after a broker downgrade, which comes in the wake of a recent shares rally.

Wetherspoon shares dropped 20p to 435p, or 4%, followed by more declines for Comet parent Kesa Electricals after last week's disappointing update for the UK business.

Kesa shares sunk 1.7p to 166.7p.

Other fallers in the FTSE 250 Index included housebuilders after Redrow dropped 7.4p to 128.1p and Barratt Developments declined 2.2p to 87.4p.

The biggest Footsie risers were Kazakhmys up 63p to 1592p, Fresnillo ahead 61p to 1594p, Petrofac up 50p to 1493p and Antofagasta up 46p to 1543p.

The biggest Footsie fallers were Cobham down 3.6p to 205.9p, Rolls-Royce off 9p to 630p, Serco down 7.5p to 565.5p and G4S down 2.1p to 250p.

15.40: The Dow Jones in New York is trading moderately higher, up 25.13 points at 11435.45. Sentiment was boosted by anticipation that the US Congress will pass the extension of Bush tax cuts later this week.

The Footsie is holding onto earlier gains, and is 51.44 points ahead at 5,864.43.

14.05:

Steady progress today - the FTSE 100 is now 60.45 points higher at 5873.40.

12.45:

We have an update on the latest wrangle between Capital Shopping Centres and its shareholder Simon Group over the deal to buy Manchester's Trafford Centre.

Capital, which owns Essex's Lakeside centre, described the new plan from Simon to fund the purchase as 'completely impracticable'. And Trafford's current owner, Peel Holdings, has also weighed in.

Capital's shares are trading up 5p at 395.

Elsewhere, plant hire company Ashtead saw its stock rise 5.8p to 161.1p after a broker upgrade in the wake of last week's forecast-beating half-year profits.

But pub group JD Wetherspoon fell 19.4p to 435.6p, or 4%, after a broker downgrade

There was more share disappointment for Comet parent Kesa Electricals after last week's downbeat update on the UK business. Kesa shares shed 5.3p to 163.1p.

The Footsie is trading up 54.41 points at 5,867.36.

12.00:

In the news today, there's a blow for oil and gas supplies firm Weir, while De La Rue names a new chief.

Weir Group is to plead guilty to charges it paid kickbacks to Saddam Hussein's regime in Iraq.

The oil and gas supplies firm will have to stump up a £13.9m confiscation payment plus a fine after the case is heard in the High Court in Edinburgh on Tuesday. Read more.

Weir shares are 15p better off today at 1,779p.

Meanwhile, Troubled banknote printer and takeover target De La Rue has appointed Tim Cobbold as its new chief executive.

Mr Cobbold has 20 years of management experience in the manufacturing sector and spent the past three years at secure power firm Chloride. Read more on this.

De La Rue shares are 3.5p lower at 831p.

Overall, the FTSE 100 at noon is 42.3 points higher at 5855.25.

10.10:

Commodity stock gains have bolstered the FTSE 100 after China ducked an interest rate rise.

The blue chip index is up 43.41 points at 5,856.36 following a relief rally in Asian markets. China's leaders have pledged to combat inflation of 5.1% - a 28-month high - but held back from hiking rates over the weekend.

Resources stocks were the major beneficiaries of London's rally as Kazakhmys rose 42p to 1571p and Lonmin gained 32p to 1889p.

Consumer goods firm Reckitt Benckiser rose 65p to 3,574.00p after it agreed to buy Indian firm Paras Pharmaceuticals.

Capital Shopping Centres Group edged up 0.6p to 390.60p as it fended off advances from US mall giant Simon Group, which wants to help fund CSC's acquisition of the Trafford Centre.

In the FTSE 250, oil and gas services firm Wellstream Holdings rose 37.5p to 784.5p after it backed an £800m takeover offer from America's General Electric.

Energy services company John Wood Group announced a deal to buy PSN for £600m, sending its stock up 8% or 40.8p to 529p.

The Dow Jones is expected to open flat, up just 3 points at 11411, according to futures trading.

In the currency markets, the pound was 1.5759 dollars compared to 1.5784 dollars at the previous close. The pound was at 1.1935 euros, unchanged from the previous close.

Richard Hunter, head of equities at Hargreaves Lansdown, told Reuters: 'There's something of a short-term relief that China decided not to raise interest rates this time round.

'There are still thoughts that if inflation continues to rise at its current rate then further rate hikes are inevitable.'

Reader service: Free brochure guides

Completely free insider guides on the latest investing trends...

sterling stacked on a financial chart

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

Most watched Money videos

{"status":"error","code":"499","payload":"Asset id not found: readcomments comments with assetId=1709496, assetTypeId=1"}