FTSE 100 close: Rio Tinto up, IPR down
The Footsie soared to new year highs after Wall Street applauded news of a startling profits surge at JP Morgan.
The FTSE 100 index closed 101.95 points up at 5,256.1. On Wall Street, the Dow Jones Industrial Average was last up 114 points at 9,985.
US stocks jumped after JPMorgan Chase, the first major US bank to report quarterly earnings, posted a surge in profits. The figures and the strong outlook from chipmaker Intel last night have raised expectations for third-quarter reports.
'It's a really good start. These are major companies coming out with what looks to be surprisingly good news,' said Eric Kuby, chief investment officer for North Star Investment Management Corp in Chicago.
Mining stocks were responsible for much of London's 2% rally, although banks were also higher after JP Morgan posted better-than-expected numbers at the start of the third quarter bank reporting season.
Rio Tinto added 150p to 2,998p after it raised its production guidance for iron ore this year by between 5% and 7.5% to 210-215m tonnes, after reporting a 12% jump in third-quarter output.
Xstrata and Kazakhmys were also in the charge, with gains of 73.5p to 1,031p and 111p to 1,289p respectively.
BP and Royal Dutch Shell rose 12.2p to 559p and 51p to 1,816p as the price of oil topped $75 a barrel.
Barclays - up 23.6p to 383.6p - was the main beneficiary after JP Morgan's third quarter profits haul of $3.6bn. Royal Bank of Scotland lifted 1.37p to 48.33p and Lloyds Banking Group added 3.3p to 93.06p.
Luxury goods group Burberry rose 5% after it reported a better-than-expected sales performance for the quarter to September 30. Shares were up 28.5p at 565.5p.
Other retailers also recovered their poise after heavy losses yesterday on fears the weaker pound will drive up purchasing costs. Next was up 31p to 1,785p, but Marks & Spencer retreated another 0.7p to 346.2p amid an apparent lukewarm response to yesterday's meeting with investors and analysts.
Diageo was also a standout loser, down 20p to 956p, after the spirits group said underlying sales fell a sharper-than-expected 6% in its first quarter.
Meanwhile, Punch Taverns fell 16% or 19.25p to 96.65p after it slashed the value of its estate and plunged to a full-year loss of £405.7m.
Shares in International Power shed 8.1p to 276.2p, leading the FTSE 100 fallers's list as Morgan Stanley cut the power firm's rating to 'equal-weight' from 'overweight' in a cautious review of European utilities.
Investors are now awaiting earnings news from Citigroup and Goldman Sachs due to report tomorrow, and Bank of America and General Electric on Friday.
Official data helped the positive mood, with figures showing that unemployment rose less than expected in August, with the number of Britons claiming jobless benefit rising at the slowest pace since May 2008.
The pound arrested its declines this week against the dollar and euro, trading at $1.595 and €1.071.
TOMORROW'S AGENDA
• Bonuses will be back with a bang when US bank Goldman Sachs delivers third-quarter figures. It is tipped to unveil profits for the period which are as much as three times higher than last year, at around $3.5bn (£2.2bn). Up to £4bn of revenues will be set aside for pay and bonuses.
• Kate Swann is expected to demonstrate her worth when WH Smith posts full-year results. Chief executive Swann has turned the chain around, partly by swapping some of the CDs and DVDs on sale for more lucrative stationery and games. The newsagent and stationery store is likely to reveal a 7% rise in pre-tax profits to £81m for the year despite a 4.4% drop in like-for-like sales.
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