Britain's top share index climbed to a one-week high on Thursday, tracking a rally in global equities, boosted by strong updates from companies like Johnson Matthey and Royal Mail and by a rally in miners. The bluechip FTSE 100 index ended 0.8 percent higher at 6,329.93 points, with European and Asian markets also higher after the US Federal Reserve said the US economy was strong enough for it to raise rates in December but that it would proceed with caution thereafter.
Top riser was Johnson Matthey, up 9.6 percent after the world's biggest maker of metal catalysts for car emission control devices announced it would pay 305 million pounds ($466 million) to shareholders as a special dividend after selling two businesses. "The numbers are looking good, and with a special dividend we're seeing confidence coming back. The earnings season hasn't been that great, and we've seen some shockers. So people are taking heart from an update like this," said Mark Priest, sales trader at ETX Capital.
Royal Mail rose 5 percent after the postal group reported results ahead of expectations and said it expected costs to be lower for the full year. Also rising was Irish building materials group CRH, which said it expects strong growth in the United States to drive an increase in full-year earnings of around 25 percent, and more when a string of recent acquisitions are included. Its shares rose 5.5 percent. Miners gained 1.1 percent, pulling away from seven-year lows hit in the previous session. Sentiment around the sector was helped by BHP Billiton, up nearly 1 percent, after it said that maintaining a healthy balance sheet was its first priority.
However, shares in loss-making miner Lonmin were down 6.2 percent following a volatile session after its shareholders approved the company's deeply discounted $400 million share issue. Lonmin shares have slumped more than 90 percent so far this year. "The approval of the bailout plan by shareholders is a breath of fresh air for the management, who will be able to raise more cash to keep its day-to-day operation going," Naeem Aslam, chief market analyst at Ava Trade, said.
"However, the bigger commodity slump will keep the major pressure on their operation," he said, adding the company could look to downsize if the situation worsened. While most bluechip corporate updates were well-received, the picture was more mixed in the mid-caps. Poundland fell 20 percent after reporting a slump in profits, hit by higher store opening costs. "The price war which has been waged by the major supermarkets is spilling over into the bargain basement with Poundland seeing a 26 percent drop in first-half profits," Russ Mould, Investment Director at AJ Bell, said in a note.
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