Britain's leading share index jumped higher on Tuesday, ending at levels not seen since May 2008, supported by rallies from banks and miners, and by gains in energy issues following results from BG Group. At the close, the FTSE 100 index was up 40.30 points, or 0.7 percent at 6,091.33, its fifth gain in the last six trading sessions.
Banks were higher, led by part-nationalised Lloyds Banking Group up 2.1 percent, sidestepping news that Britain has slapped an extra 800 million pound tax on lenders. The British government said on Tuesday it will impose the full amount of a planned levy on bank balance sheets this year, instead of phasing it in.
"It is likely to remain more of a political football than one actually affecting investors' views towards the major UK banks," said Ben Critchley, a sales trader at IG Index. Integrated oils also lent their strength to the blue chips, led by BG Group which gained 2.1 percent after posting forecast-beating fourth-quarter results.
Miners rallied after early falls, with African Barrick Gold up 3.4 percent as the gold price rose on short-covering, and as a surprise rate hike from top commodity consumer China was shrugged aside.
"The move by China to hike interest rates is a move to curb spiralling inflation and normalise growth, not impede it," said Joshua Raymond, market strategist at City Index. Xstrata gained 1.7 percent after the miner beat forecasts with an 86 percent jump in full-year profit on stronger commodity prices, gave a positive outlook for 2011, and set its final dividend at 20 cents.
"This reflects a return to pre-financial crisis levels and confidence in the medium-term outlook, and underscores our buy recommendation," said Daniel Harris, head of dealing at CFD and spread betting firm H2O Markets.
Among individual stocks, engineer GKN was the top blue chip gainer, up 5.6 percent reflecting strength in European carmakers ahead of upcoming sector results, and vague underlying bid speculation, said traders.
Smiths Group, ahead 2.1 percent, also saw a return of bid chatter, with US firm Honeywell once again seen as a possible predator, traders said.
Inmarsat added 3.6 percent as Harbinger Capital Partners sold its remaining stake in the satellites operator, clearing an issue overhanging the stock, and prompting upgrades from BofA Merrill Lynch and Goldman Sachs. Retailer Marks & Spencer rose 3.8 percent after poaching Tesco's Laura Wade-Gery to head up its Internet business.
Tesco fell 1.5 percent on the move. Oil explorer Cairn Energy was a top blue chip faller, down 2.4 percent. India wants state-run Oil and Natural Gas Corp's concerns over royalties to be addressed before approving a $9.6 billion sale of control of Cairn India's assets to Vedanta Resources. India-focused miner Vedanta shed 0.8 percent.
Comments
Comments are closed.