Commodity stocks led Britain's top share index higher on Tuesday, after Alcoa kicked off the US earnings season with an upbeat outlook and data from China lifted sentiment, while retailers rallied after some encouraging updates. London's blue chip index rose 84.44 points, or 1.5 percent to 5,696.70, making up for the 1.5 percent decline since last Wednesday, as the FTSE 100 just failed to close above 5,700.
---- Miners lead after Alcoa results, China data
A resistance level at which it has fallen away from sharply twice before, in early November and January. Trade again was thin, just 95 percent of its already light average 90-day volume. UK gains were supported as Wall Street responded favourably to Alcoa's forecast of 7 percent growth in global aluminium demand this year and a global supply deficit, despite the company missing earnings expectations.
The announcement helped lift UK miners, while integrated oils rallied too as both sectors gained in tandem with underlying commodity prices after data in China showed commodities imports remained robust in December despite ebbing demand. "These announcements have reminded traders that with expectations so low for this year there is room for positive surprises," Colin Cieszynski, Market Analyst at CMC Markets, said.
Kazakhmys was up 5.9 percent, but highlighting the continuing worries over the outlook for the global economy gold miner Fresnillo, which is used as a proxy to the safe haven yellow metal, rose 5.7 percent. Energy firm BG Group added 1.5 percent as three sources with direct knowledge of the matter said it had received six to seven bids for acquiring its 65 percent stake in India's Gujarat Gas, in a deal valued at about $900 million.
Banks, knocked by Europe debt concerns on Monday, bounced back as Fitch backed away from threats to cut France's triple-A credit rating this year. Barclays and Royal Bank of Scotland gained 5.7 and 5.2 percent respectively. Sales at Marks & Spencer, Debenhams and Majestic Wine lifted spirits in the sector following disappointing updates from the likes of HMV, Game Group and Morrison's in recent days.
M&S, Britain's biggest clothing retailer, climbed 3 percent, erasing the previous sessions losses, as sales in the 13 weeks to December 31 rebounded from falls in the second-quarter. Mid cap Debenhams was up 9 percent after posting a slightly better than expected performance in underlying sales in the last 18 weeks as deep discounts lured customers in the run up to Christmas.
Small cap Majestic Wine added 15 percent after the British wine retailer reported a 4 percent rise in underlying Christmas sales. There were only a handful of blue chip fallers, with drugmaker GlaxoSmithKline down 1.1 percent, extending Monday's falls, which followed slightly downbeat drug filing news.
Aggreko fell 0.4 percent, surrendering some of the previous session's gains as RBC Capital Markets downgraded its rating for the temporary power provider to "sector perform" from "outperform" on valuation grounds. And ARM Holdings shed 1.5 percent, pulling back after gains on Monday following a bullish note from Citigroup who said the chip designer's fourth quarter results are expected to be ahead of consensus estimates.