Leading shares reach their best level since November

Leading shares have started 2009 on a bright note, reaching their best level since early November, with the heavyweight mining sector leading the way after a rise in metal prices.

Vedanta Resources, which announced just before the new year break that it planned to restart its $250m share buyback programme in January, climbed 82p to 693.5p. Xstrata added 107.5p to 747.5p, while Rio Tinto rose 204p to £16.94 and Antofagasta added 46p to 471.5p.

Poor UK housing and manufacturing figures merely confirmed investors expectations of a tough year ahead, and raised hopes of another hefty interest rate cut by the Bank of England when the monetary policy committee meets next week.

So with Wall Street moving 150 points higher by the time London closed, ahead of a meeting on Monday between Congress and Barack Obama about his economic stimulus proposals, the FTSE 100 index ended 127.62 points higher at 4561.79. This was its highest since 4 November last year although unsurprisingly there was little real trading done with many dealers deciding to extend their holiday rather than returning to work.

On the currency markets the prospect of a further UK rate cut pushed the pound lower against both the dollar and the euro. Ryan Kneale, market analyst at City bookmaker BetsForTraders said:

"Today's rally is a rather timid affair and lacks any real conviction. With trading volumes still thin and commodity prices rising, it is the increase in commodity stocks that is predominantly dragging the FTSE up. Elsewhere banking stocks have also started 2009 in positive territory, as talks of further rate easing by the Bank of England re-surfaced."

Among the banks, Barclays added 3.6p to 157p, Royal Bank of Scotland rose 3.1p to 52.5p and HBOS was 3.5p higher at 72.5p.

Retailers rose in the wake of some fairly upbeat news from John Lewis, which reported good trading ahead of Christmas and a record first day for its clearance sale. Next added 28p to £11.09, Marks & Spencer moved 6.25p higher to 221p and Debenhams finished 1p better at 25.5p.

Sports group JJB closed up 1.17p at 5.26p as it announced Sir David Jones, formerly of Next, would become its executive chairman.

Elsewhere InterContinental Hotels, the world's largest hotel group, added 35.5p to 597.5p as Malaysia's Hong Leong Berhad - run by billionaire Quek Leng Chan - declared a 3% stake in the business.

But pharmaceuticals group GlaxoSmithKline slipped 18p to 1266.5p as profit takers moved in, outweighing reports of delays to the US launch by Ranbaxy of a generic rival to its Imitrex migraine treatment.

Imperial Energy, the Russia-focussed business, added 2p to £12.49. Earlier in the week, Indian group ONGC received acceptances totalling 97% for its £12.50 offer for Imperial. There had been some concerns ONGC might back out and return with a lower offer if Imperial shareholders did not back the deal.

Pubs group JD Wetherspoon rose 14.75p to 325.75p as it announced plans to cut the price of certain beers to 99p a pint, and offer five different meals for £2.99 each. Mark Brumby of Blue Oar Securities said:

"With a number of operators attempting to price steak and ale pies at £8.95 and pints of standard lager at near £3.00, this is an important move."

Finally, mining minnow GCM Resources climbed 53.25p to 79.5p on hopes that the recent election in Bangladesh would be good for the company.