FTSE close: Mining and retail stocks gain

 

17.00: The FTSE 100 index at the close was up 48.38 at 6055.75.

Worried traders at the Tokyo Stock exchange

Stocks in Japan rose overnight, despite a further quake shock

14.45:

The Dow Jones is 22 points higher at 12,431.4 shortly after the opening bell.

The FTSE 100 is still buoyant, up 58.6 points at 6,066.

13.50:

The Dow Jones is forecast to open higher as worries about the latest earthquake in Japan recede.

US investors are so far calm as the prospect of a government shut-down from midnight looms unless there is an eleventh-hour breakthrough in budget negotiations.

Expedia shares could prove big movers again today following news it plans to spin off its popular travel review website TripAdvisor. We have more on that here.

The FTSE 100 is up 57.7 points at 6,065.1.

12.40:

The FTSE 100 is flying high, up 52.3 points at 6,059.7 as oil and gold prices fuelled a strong session for mining stocks.

Anthony Grech, head of research at IG Index, said: 'Not even a move by oil to its best levels since September 2008 is dampening sentiment today and investors are once again eyeing the 6100 mark on the FTSE index as the next major hurdle.'

Silver miner Fresnillo topped the risers board, up 3%, or 40.5p to 1,648.5p, while Kazakhamys was ahead 34p to 1,495p.

Energy giant BP was also up 3.9p to 478.8p despite its failure to overturn the attempted block on its tie-up with Russian state-backed oil firm Rosneft.

Mobile phone giant Vodafone, which is one of London's most commonly traded stocks, rose 0.5p to 178p after JP Morgan raised its price target.

There was also an improvement for retail stocks after the latest weekly sales report from John Lewis showed sales excluding VAT rose 1.4% in the seven days leading up to Mother's Day.

UK small caps gain 0.1%, underperforming both the blue chips and the midcaps, which climb 0.8% and 0.3% respectively. Shares in Burst Media rise 18.9p (up a whopping 3789%). Online video search firm Blinkx is to acquire the online ad company for $30m, representing a premium of about 400% to Burst's mid-market closing price on Thursday. The deal with Burst alongside a trading update helps Blinkx 9.2p higher to 120p.

Games Workshop climbs 48p (13%) after the fantasy gaming company forecasts full-year pretax profit ahead of current market estimates, helped by strong gross margins and cost savings.

10.30: The London market recovered its poise today after another earthquake in Japan prompted a late retreat for shares on Thursday.

With the impact of the latest quake thankfully appearing small, Asian markets ended by closing nearly 1% higher and helped propel the Footsie up 42 points to 6,049, edging closer to a high for the year so far.

It was also rebounding on the back of busy mergers and acquisitions activity and record high metal prices propelling heavyweight mining stocks higher.

'(The market move) is a bounce back on the back of the news from Japan and that was priced in the on the back of the Asian markets responding strongly last night,' Martin Dobson, head of trading at Westhouse Securities, said.

Miners gained after gold struck a record high on Friday, and silver crossed $40 an ounce for the first time since 1980. A weaker dollar and concerns about inflation sent investors piling into precious metals.

Global miner Rio Tinto rose 72.5p (1.6%) to 4,457.5p after its $4bn bid for Mozambique-focused coal miner Riversdale succeeded when its shareholding passed the 50% threshold and it assumed control. Indian-focused miner Vedanta gained 28p (1.1%) to 2,459p after fourth-quarter production figures, alhtough uncertainty persists over its long-delayed purchase of Cairn Energy's Cairn India unit.

In a global equity strategy note, UBS upgraded its stance on the materials sector to 'overweight' and placed energy and banks among its top picks.

The case for equities remained strong compared to other asset classes, according Citigroup analyst Jonathan Stubbs.

'Equities continue to look attractive relative to bonds in a more inflationary world,' he said. 'We forecast double digit returns for equities as markets track expected earnings growth in 2011. Stay bullish.'

Traders were also encouraged by the European Central Bank's decision to raise interest rates, which was taken as a sign that the region's economy is improving.

A broad-based rally for London's shares saw gains for insurance pair Prudential and Aviva - up 11.5p at 745p and 7.2p to 454.5p respectively - and for BAE Systems after a gain of 5.2p to 340.2p.

There was also an improvement for retail stocks after the latest weekly sales report from John Lewis showed sales excluding VAT rose 1.4% in the seven days leading up to Mother's Day. Risers included Next, which lifted 26.5p to 2078.5p, while Marks & Spencer added 2p to 358.9p.

JD Sports Fashion proved the exception ahead of its results next week, falling 20.2p to 877.2p, while housebuilders were also under pressure in the FTSE 250 index after Bovis Homes declined 7p to 424.2p and Barratt Developments slipped 1.7p to 107.2p.

Shire gained 33.8p (1.9%) to 1,824p after an update from US regulator on a safety review of hyperactivity medications recommended no changes to the labels or use of the medications at this time.

Scottish & Southern Energy, one of Britain's biggest utilities, topped the FTSE leader board, rising 31.3p (2.4%) to 1,314.3p following an upgrade to 'outperform' from 'neutral' by Credit Suisse.

A downgrade to 'underperform' from 'neutral' by the same broker, however, saw broker ICAP shed 11.5p (2.1%) to 528.5p. Intertek fell 2.3% as JPMorgan cut its rating on the testing firm to 'neutral' from 'overweight', on valuation grounds. Temporary power supplier Aggreko retreated 21p (1.2%) to 1,675p having been the top riser in the previous session.

Banks were mixed ahead of an announcement from the European Banking Authority, which will tell Europe's banks on Friday how much capital they need to hold to withstand a two-year recession, as financial watchdogs seek to repair the sector's tattered image in the eyes of investors.