FTSE 100 close: Resource firms mine a rich seam
London shares enjoyed a strong start with resources companies leading the FTSE 100 higher on the back of better economic news from the US.
Market watcher: Will share have a strong finish to the week?
The biggest gainer in early trading was mining firm Lonmin, rising 111p, or 8.4%, higher to 1,428p.
Speculation from Nomura over a potential merger between miners Xstrata and Anglo American saw the duo rise 34.5p to 684p and 88p to 1777p respectively as the sector dominated the risers board.
They were accompanied by Kazakhmys, 3.52% higher at 690.5p, BG Group, 4.54% higher at 1,128p and Eurasian Natural Resources, 5.79% higher at 649p.
With US crude rising above $65 per barrel, on track for its largest monthly gain in more than a decade, oil majors constituted the FTSE's top gainers in early trading.
US stocks finished strongly yesterday, with energy shares boosted by higher crude oil prices. Thanks to firmer metals prices, heavyweight miners also rose, with Rio Tinto, BHP Billiton, Antofagasta and Kazakhmys rising between 1.25% and 5.18%.
Burberry was up 1.75p to 382.5p after CEO Angela Ahrendts confirmed the luxury clothes and accessories firm would open 10 to 15 new stores in both North and South America. New stores are expected in New York, Los Angeles and Boston.
The FTSE 100 closed 30.4 points up at 4417.9.
Sentiment was boosted by Nationwide's house price survey, which showed British house prices rose 1.2% in May, the second time in three months, slowing the annual rate of decline to its lowest since August.
The rise in Nationwide house prices lifted housebuilders, with Taylor Wimpey up 2.75p at 32p, Persimmon 18.5p stronger at 364p and Redrow 5.75p higher at 195.75p.
Data also showed British consumer confidence held steady in May as rising gloom over the economy was offset by an improvement in Britons' expectations for their own finances.
'The market up this morning is fairly much across the board... on the basis of those numbers. It's going to remain the economic figures at centre stage for a while yet,' said Richard Hunter, head of UK equities at Hargreaves Landsdown.
Banks, which were yesterday's biggest fallers, reversed course to climb as the previous day's investor pessimism about the outlook for the financial sector subsided.
'Banks are indeed one of the sectors to be among the first to suffer from any sentiment. We're seeing a bit (of) cautious buying on the banks this morning. The big concern around the banks remains as to whether the are going to be any more traditional recessionary-type writedowns coming through,' Hunter said.
Investors sold bank shares the previous session after the yield on 10-year US Treasuries rose, raising concerns that high borrowing costs could stunt the global economic recovery. Hunter also said.
Barclays was up 3.66% to 297.5p, HSBC climbed 2.06% to 556.5p, Lloyds Banking Group rose 4.62% to 68p and Royal Bank of Scotland was up 2.14% to 38.2p.
Shares in water company Severn Trent dropped 1.75% after its full-year results failed to excite. Severn said profits beat expectations, driven by price increases, increased its dividend and said its cash flow needs were funded for the next two years.
Most watched Money videos
- Iconic Dodge Charger goes electric as company unveils its Daytona
- Tesla unveils new Model 3 Performance - it's the fastest ever!
- Skoda reveals Skoda Epiq as part of an all-electric car portfolio
- Mini unveil an electrified version of their popular Countryman
- How to invest to beat tax raids and make more of your money
- Land Rover unveil newest all-electric Range Rover SUV
- How to invest for income and growth: SAINTS' James Dow
- The new Volkswagen Passat - a long range PHEV that's only available as an estate
- BMW meets Swarovski and releases BMW i7 Crystal Headlights Iconic Glow
- MailOnline asks Lexie Limitless 5 quick fire EV road trip questions
- 'Now even better': Nissan Qashqai gets a facelift for 2024 version
- 2025 Aston Martin DBX707: More luxury but comes with a higher price
- Pandol and Advil maker Haleon hurt by milder flu season
- MARKET REPORT: Aston Martin shares in reverse as sales...
- Britain must go it alone when it comes to interest rates,...
- US Federal Reserve forced to calm fears over rate hikes
- The £80bn takeover feeding frenzy: Bids for UK firms soar
- US drugs giant Pfizer posts a drop in sales in a...
- Fresh blow for City as Flutter votes to move main listing...
- Standard Chartered beats profit estimates as higher...
- I'm 'very well paid', says Glaxo boss Emma Walmsley
- Shell smashes profit forecasts and unveils fresh bumper...
- Booming Next closes in on £1bn profit milestone with...
- Mulberry sales plunge as slower demand casts a shadow...
- Change stamp duty so it's easier to move home, says...
- Smith & Nephew rocked as 43% of investors rebel over fat...
- Hiscox reports rise in premiums - but warns of 'moderate'...
- Melrose Industries enjoys strong engine sales as revenue...
- Major mortgage lender ups rates for second time this week...
- UK GDP growth will be second-worst of all G7 nations in...